, *U T BMM JO
Annual Report 2008-09
, 8IBU T *OTJEF About HUL
2
Chairman’s Letter
12
Financial Performance and Trends
14
16 Board of Directors’ Profile 18 Notice of the AGM 25
Awards and Accolades
Directors’ Report and Management Standalone Financial Statements
28 Corporate Governance 46
Discussion & Analysis
Standalone Financial Statements Economic Value Added
Significant Accounting Policies 64
64
111
112 Statement Pursuant to Section 212 149 Investor Safeguards 151 Corporate Information 153
Consolidated Financial Statements
Proxy
Profit and Loss Account 66 Balance Sheet 67 Cash Flow Statement 68 Notes and Schedules 70 Auditors’ Report 108 Consolidated Financial Statements Significant Accounting Policies 112 Profit and Loss Account 114 Balance Sheet 115 Cash Flow Statement 116 Notes and Schedules 118 Auditors’ Report 148
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U
You, our stakeholders, are at the centre of everything we do. This simple philosophy has helped shape the organisation to become what it is today – India’s leading FMCG company. Our relentless efforts to ensure that we make a difference in your lives – as shareholders, as consumers, as business partners and as citizens – has helped us achieve a position of pre-eminence in the Indian industry. It has helped us develop and evolve a portfolio of world class products that help people feel good, look good and get more out of life. It has helped us to become an integral part of the communities we operate in and seek to serve. It has helped us become a part of your everyday life – right from your morning cup of tea to your brushing routine at bedtime. This spirit of serving a billion needs and aspirations is what drives and motivates each of the more than 15,000 employees of Hindustan Unilever everyday in their collective pursuit of the Company’s vision of making a real difference to every Indian.
Welcome to the world of
Hindustan Unilever. A world where life revolves around U - your needs, your aspirations, and your quality of life.
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"CPVU )6-
Incorporation The Company was incorporated in 1933 but its products have been sold in India since 1888. In its journey of over 100 years the Company has always operated with the singular belief that ‘what is good for India is good for HUL’.
Parentage Hindustan Unilever Limited is a part of the €40 billion Unilever Group. The Group has more than 400 brands
Business Presence Home & Personal care (HPC) – Personal Wash, Oral Care, Skin Care, Hair Care, Fabric Wash,
presence in over 100 countries and
Household Cleaning, Deodorants, Colour Cosmetics
employs more than 174,000 people
and Beauty and Wellness services.
worldwide.
Food & Beverages (F&B) – Tea, Jam, Flour, Sauces, Soups, Coffee, Ice Cream, Bakery Products, Salt and Recipe Mixes. Water – Pureit in - home water purifier. Exports – HPC, F&B, Marine (Surimi and Crabsticks), Rice and Leather. Hindustan Unilever Network
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spanning 14 categories of home, personal care and food products. It has
Hindustan Unilever Limited
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Reach Over 700 million consumers. Covers over 6.3 million retail outlets including direct reach to over 1 million. Over 2,000 customers. Over 2,000 suppliers and associates.
Geographical Presence
People
Headquartered in Mumbai.
More than 15,000 employees,
National Sales Network with offices in 4 metros.
including 1,300 managers.
More than 35 manufacturing locations across India, with major hubs being Assam, Uttaranchal, Himachal Pradesh, Pondicherry and Dadra & Nagar Haveli.
More than 200 highly qualified scientists and technologists.
Listing Shares listed at BSE (Stock code - 500696) and NSE (Stock code - HINDUNILVR). Shareholder base of over 3.5 lakh. A BSE-30 and Nifty-50 stock.
About HUL
Annual Report 2008-09
3
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5IF )6- #SBOET
4
Hindustan Unilever Limited
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About HUL
Annual Report 2008-09
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6
Hindustan Unilever Limited
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*U’T BMM JO 6OEFSTUBOEJOH A Billion ‘Us’ make the Indian market. But unlike many markets in the world, where there is a level of uniformity in consumer groups, in India uniqueness is the norm. It is one of the most culturally diverse countries in the world with vast disparity in income levels adding an extra dimension of complexity to the market. What does it take to become India’s largest
penetration in Shampoos and Fabric Wash
fast moving consumer goods company in these
segments to introducing top-end Skin Care
challenging circumstances? What does it take to
products catering to emerging consumer needs
touch two out of three Indians every day? What
such as anti-ageing.
does it take to build strong consumer brands in the world’s second most populous nation? The answers to these very important questions lie in a single word.
Understanding. Consumer understanding is at the heart of our business. This backed by our strong R&D capabilities has enabled us to bring consumer relevant innovations. This understanding helps our brands to
Our endeavour to serve the many Indias embedded in the one India, has enabled HUL to build an enviable portfolio of products with the unique distinction of ‘straddling the consumer pyramid.’ We offer premium brands to the affluent, value-for-money brands to middleincome consumers, and affordably priced brands to the low-income consumers.
Our success is driven by an understanding of ‘U’.
constantly evolve and retain consumer preference. This is the key reason why brands such as Lux and Lifebuoy have remained the most preferred and trusted brands in their categories, over several generations. This has also helped us to grow the markets through innovations targeted at catalysing penetration, consumption or upgradation. From introducing affordable sachets to drive
About HUL
Annual Report 2008-09
7
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*U’T BMM JO 6OJUJOH At HUL, we consistently work towards instilling a culture of harmonious unity, collective responsibility and team performance. HUL employs more than 15,000 people across the country. People drive our business. They are the driving
This success has been underpinned by a spirit
forces behind our progress and our growth.
of unity amongst our people to take challenges
Harnessing, developing and rewarding their
head-on, collectively. This spirit is needed more
skills, energy and commitment is our priority.
than ever today in the face of the challenging
We have always recruited the best talent. The culture of integrity and meritocracy has helped our people to flourish and bring out the best in them. Our people have come from every part of this country. We promote inclusive growth without compromising on meritocracy. The philosophy of ‘Unity in Diversity’ is embedded into our DNA and has helped us to become what we are today. Throughout our history we have used crisis as an opportunity to emerge stronger and better.
8
Hindustan Unilever Limited
economic environment.
Our spirit of unity is led by the passion to serve ‘U’.
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About HUL
Annual Report 2008-09
9
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10
Hindustan Unilever Limited
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*U’T BMM JO 6QMJGUJOH We see opportunities to grow our business by addressing some of the most important social and environmental challenges facing the world today. We are guided by our belief of ‘Doing Well by Doing Good’. Our Corporate Responsibility strategy
In 2008, our employees volunteered more
addresses HUL’s most significant sustainability
than 40,000 hours of social work. We intend
impacts of hygiene, nutrition, enhancement of
to continue on this path. This participation will
livelihoods, reduction of greenhouse gases and
help embed the spirit of social upliftment into
water footprint by integrating these objectives
the heart, mind and soul of the organisation. It
into our brands, our people and our processes.
is ultimately the commitment of each and every
Serving the communities where we operate has been integral to our business conduct. Rainwater harvesting and soil conservation projects around our factories in Khamgaon,
employee that has helped shape HUL as an institution with a purpose beyond business.
Our focus on ‘being the change’ is incomplete without ‘U’.
Maharashtra and Silvassa, Dadra & Nagar Haveli, have made significant impact in these regions. Our brands have been at the forefront of social change. One of our oldest brands, Lifebuoy, has been conducting a sustained direct-contact health education programme that aims to raise hygiene standards in Indian rural communities.
About HUL
Annual Report 2008-09
11
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Dear Shareholders, My warm greetings to all of you. In the following pages of Report and Accounts, I am pleased to present yet another year of very good performance by your Company. You will no doubt appreciate that this performance was delivered in a challenging economic context.
$IBJSNBO’T -FUUFS
The global economy suffered a slowdown; afflictions that started as financial sector issues in the US spread fast to the real sectors of the economy across the globe. Although India’s domestic economy grew strongly for the whole year, many sectors like automotives, capital goods, consumer durables and realty decelerated significantly towards the second half of the year. The performance of the exports sector was well below expectations. Another major issue we had to contend with during the year was unprecedented volatility in the price of commodities, driven largely by the swings in petroleum crude prices. Severe and continued rise during the year, the precipitous fall towards the later part of the year, and the associated uncertainties in material price movements needed very careful management. Many public policies were implemented to squarely address some of these issues in the economy. FMCG markets generally held well although some categories like fabric wash registered a slowdown in volume growth. I am pleased to state that for the financial year 2008-09 (i.e. comparable period of 12 months ended March 2009 over that of March 2008), your Company recorded an overall sales growth of 15.5% with FMCG categories growing at 18.3%. Both HPC and Foods contributed to this growth. Operating margins expanded by 0.4%, from 14.1% to 14.5%.
12
Hindustan Unilever Limited
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Continued drive on excellence in execution both at the front end of sales operations and the back end of supply chain and functional processes, helped growth and margin. We continued to strengthen our brand equities through innovation and appropriate levels of advertising and promotional spending. This is key to delivering consistent and profitable growth in the future. Margin management was a significant challenge in the context of a volatile commodity cost environment. The impact of this was managed dynamically through a combination of judicious pricing, aggressive cost savings programmes and tight control of indirect costs. This allowed us to deliver margin improvements while continuing to invest in our business.
I am always inspired by HUL’s vision of earning the love and respect of India by making a real difference to every Indian. We believe that we can contribute through both our business and the manner in which we conduct our business. As we call it, Doing Well by Doing Good.
Your Company’s key assets are its brands, people and reputation. HUL is known for its powerful brands, formidable talent pool and excellent corporate reputation. An estimated 700 million people in our country use our products. Our brands continue to feature high in India’s most trusted brands lists. During the year we won many awards for Corporate Social Responsibility, Innovation and Human Resource practices. Our people received recognition for their outstanding professional contribution in their respective fields. I am always inspired by HUL’s vision of earning the love and respect of India by making a real difference to every Indian. We believe that we can contribute through both our business and the manner in which we conduct our business. As we call it, Doing Well by Doing Good. It is about integrating social good into business good. While
Chairman’s Letter
delighting the consumers and rewarding the investors are very important, these need to be delivered with a larger benefit to communities. We have outlined our actions in this area in the Directors’ Report (page no. 41), and this balance is an integral part of our corporate values. We have a well defined Code of Business Principles (CoBP) that guides our day to day actions. These principles are well disseminated across the employees, business partners and associates of the Company and drive our behaviour – as individuals and as a responsible Corporate. I am also happy that your Company continued to receive excellent support and assistance from Unilever. In the spirit of interdependence, HUL enjoys unrestricted access to the repertoire of Unilever’s brands, technologies, business processes and international best practices. HUL is also able to take advantage of Unilever’s global scale, particularly in the areas of brand marketing and advertising, international supply chain, procurement of material and leadership development. In conclusion, I would like to reiterate that we will remain focused on competitive, profitable and sustainable growth. This will be done in the context of ‘Doing Well by Doing Good’ and by upholding the highest levels of Corporate Integrity. I thank you all for your constant support and goodwill for HUL. I am sure this will continue in the years ahead. With warm regards,
H.Manwani Annual Report 2008-09
13
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'JOBODJBM 1FSGPSNBODF 10 year track record Rs. crores
1999
2000
2001
2002
2003
2004
2005
2006
2007 2008-09
Profit & Loss Account
(15 months)
Gross Sales* Other Income Interest Profit Before Taxation @ Profit After Taxation @ Earnings Per Share of Re. 1# Dividend Per Share of Re. 1# Balance Sheet Fixed Assets Investments Net Deferred Tax Net Current Assets
10917.69 11392.14 11781.30 10951.61 11096.02 10888.38 11975.53 13035.06 14715.10 318.98 345.07 381.79 384.54 459.83 318.83 304.79 354.51 431.53 (22.39) (13.15) (7.74) (9.18) (66.76) (129.98) (19.19) (10.73) (25.50) 1387.94 1665.09 1943.37 2197.12 2244.95 1505.32 1604.47 1861.68 2146.33 1069.94 1310 .09 1540.95 1731.32 1804.34 1199.28 1354.51 1539.67 1743.12 4.86 5.95 7.46 8.04 8.05 5.44 6.40 8.41 8.73 2.90 3.50 5.00 5.16 5.50 5.00 5.00 6.00 9.00
21649.51 567.79 (25.32) 3025.12 2500.71 11.46 7.50
1087.17 1203.47 1320.06 1322.34 1369.47 1517.56 1483.53 1511.01 1708.14 1006.11 1769.74 1635.93 2364.74 2574.93 2229.56 2014.20 2413.93 1440.80 246.48 269.92 267.44 226.00 220.14 224.55 212.39 187.25 (373.38) (75.04) (239.83) (368.81) (409.30) (1355.31) (1353.40) (1833.57) 2280.53 2599.83 3127.43 3717.17 3843.03 3563.82 2362.56 2796.09 1527.76 Share Capital 220.06 220.06 220.12 220.12 220.12 220.12 220.12 220.68 217.74 Reserves & Surplus 1883.20 2268.16 2823.57 3438.75 1918.60 1872.59 2085.50 2502.81 1221.49 Loan Funds 177.27 111.61 83.74 58.30 1704.31 1471.11 56.94 72.60 88.53 2280.53 2599.83 3127.43 3717.17 3843.03 3563.82 2362.56 2796.09 1527.76 * Sales before Excise Duty Charged @ Before Exceptional/Extraordinary Items # Adjusted for bonus
2078.85 332.62 254.83 (182.85) 2483.45 217.99 1843.52 421.94 2483.45
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008-09 Segment-wise Sales (%) Soaps, Detergents & Household Care Personal Products Foods Chemicals, Agri, Fertilisers & Animal Feeds Others EBIT as % of Sales Fixed Assets Turnover (No. of times) Economic Value Added (EVA) (Rs. crores) PAT / Sales (%) Return on Capital Employed (%) Return on Net Worth (%) * Shown on an annualised basis
41 17 34
40 17 37
40 21 33
45 22 30
44 24 29
45 26 27
45 28 25
47 29 22
47 29 22
49 29 20
6
4
3
2
2
1
1
1
1
1
2 10.7 10.0 694 9.8 61.8 50.9
2 12.3 9.5 858 11.5 64.6 52.7
3 14.0 8.9 1080 13.1 62.4 53.9
1 17.6 8.3 1236 15.8 59.4 48.4
1 18.4 8.1 1429 16.3 60.2 82.8
1 13.4 7.2 886 11.0 45.9 57.2
1 12.3 8.1 1014 11.3 68.7 61.1
1 13.1 8.6 1126 11.8 67.0 68.1
1 13.1 8.6 1314 11.8 78.0 80.1
1 13.1 8.3* 2097 11.6 107.5* 103.6* Rs. crores
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008-09 HUL Share Price on BSE 225.00 206.35 223.65 181.75 204.70 (Rs. Per Share of Re. 1)* Market Capitalisation 49513 45409 49231 40008 45059 Exports** 1803 1934 1845 1411 1416 Contribution to Exchequer 2341 2524 2478 2609 2999 * Based on year-end closing prices quoted in the Bombay Stock Exchange, adjusted for bonus shares ** Includes exports made by subsidiaries
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Hindustan Unilever Limited
143.50
197.25
216.55
213.90
237.50
31587 1459 2674
43419 1461 2638
47788 1369 2813
46575 1413 3133
51770 1630 4429
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1FSGPSNBODF 5SFOET Market Capitalisation and HUL Share Price
EBIT as % of Sales
Gross Sales (Rs. crores)
250.00
20.0
22500 20000
50,000
200.00
16.0
17500
40,000 150.00
15000
10000
8.0
7500
30,000 100.00 20,000
4.0
2007
2008-09
2006
2005
2004
2003
2002
2001
2000
Fixed Assets Turnover
Segment-wise Sales (%)
2007
2006
2005
2004
2003
2002
2001
Market Capitalisation as at year end (Rs. Crores) HUL Share Price on BSE (Rs.)
Exports (Rs. crores)
(No. of times)
100
2008-09
-
1999
2007
2008-09
2006
2005
2004
2003
2002
2001
2000
1999
1999
2000
-
2500 0
50.00
10,000
5000
(Rs.)
12500
(Rs. Crores)
12.0
80.0
2,500
70.0 80
2,000 60.0
60
50.0
1,500
40.0 40
1,000
30.0 20
20.0 500
Earnings & Dividend Per Share (Rs.)
10.0
4,000
1,600
9.0
3,500
1,400
8.0
1,200
7.0
1,000
6.0
2,000
4.0
1,500
3.0
Financial Performance and Trends
2007
2008-09
2006
2005
Annual Report 2008-09
2007
2008-09
2006
2005
2004
2007
2006
2005
2004 DPS
2008-09
EPS
2003
2002
2001
2000
1999
2008-09
2007
2006
2005
2004
-
2003
500
-
2002
1.0
-
2001
200
2000
2.0
2003
1,000
400
1999
2004
2,500
5.0
2002
600
3,000
2001
800
2003
4,500
11.0
1,800
2002
5,000
12.0
2,000
2001
(Rs. crores)
13.0
2,200
2000
Contribution to Exchequer
2000
(Rs. crores)
1999
Economic Value Added (EVA)
1999
2007
Others
-
2008-09
2006
2005
2004
2003
2002
2001
2000
-
1999
Soaps, Dets & Household Care Personal Products Foods Chemicals, Agri, Fertilisers & Animal Feeds
2008-09
2007
2006
2005
2004
2003
2002
2001
2000
0
1999
10.0
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"XBSET BOE "DDPMBEFT Corporate Awards CII (Western Region) HR Excellence Award 2008. CNBC AWAAZ Consumer Awards 2008 for ‘Most Preferred Personal Care Company’ and ‘Most Preferred Home Care Company’. Dun & Bradstreet–Rolta Corporate Awards 2008 for being the top Indian company in the FMCG sector. Express Logistics & Supply Chain Award in the category ‘FMCG Manufacturing Supply Chain Excellence’.
Innovation Awards UNESCO Water Digest Water Awards 2008-2009 in the category of Best Domestic
Corporate Responsibility Awards Bombay Chamber Good Corporate Citizen Award for the year 2007-08. Bombay Chamber Civic Award 2007 in the category of Sustainable Environmental Initiatives, for our water conservation and harvesting project at Karchond village, Silvassa in Dadra & Nagar Haveli. Social and Corporate Governance Award in the category of Best Corporate Social Responsibility Practice, awarded by BSE, NASSCOM Foundation and Times Foundation.
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Hindustan Unilever Limited
Non-Electric Water Purifier for Pureit. Golden Peacock Innovative Product/ Service Award for Pureit. UK Trade & Investment India Business Award in the Innovation category for Pureit. Silver Trophy of the EMPI - Indian Express Indian Innovation Awards for Project Shakti.
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Brands and Marketing Awards 16 HUL brands among the country’s 100 most trusted brands featured in Brand Equity Most Trusted Brands 2008 survey conducted by AC Nielsen ORG - MARG. Five HUL brands (Lux, Dove, Pears, Clinic Plus and Sunsilk) won the Reader’s Digest Trusted Brand 2008 Awards. Eight Emvies Awards (3 Gold and 5 Silver) across categories. 34 awards at India Star Awards for outstanding innovation in packaging concepts and systems across Foods and Home & Personal Care brands. Customer and Brand Loyalty Award in ‘Consumer Non Durables Sector’.
Individual recognitions Our Chairman, Harish Manwani won the CNBC Asia Business Leader of the Year Award 2008. Our Vice Chairman and CFO, D. Sundaram was awarded the Best performing CFO in FMCG Sector at the CNBC-TV18 CFO Awards 2008 for excellence in the financial field. Our Executive Director - HR, Leena Nair received the ‘Young Women Achiever Awards - 2009’ for outstanding work in the field of business. She was also felicitated by Business Today as one of the 25 Most Powerful Women in Indian business.
Awards and Accolades
Annual Report 2008-09
17
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#PBSE PG %JSFDUPST’ 1SPG JMF
)BSJTI .BOXBOJ Non-Executive Chairman
.S )BSJTI .BOXBOJ assumed charge as the Non-Executive Chairman of the Company with effect from 1st July, 2005. He is also President Asia & Africa, Central & Eastern Europe and a member of the Unilever Executive (UEx), an 8 member team that oversees Unilever’s operations worldwide. Mr. Manwani joined the Company in 1976. He joined the Board of the Company in 1995, as a Director responsible for the Personal Products business. In addition, he held regional responsibility as the Category Leader for Personal Products for the then Central Asia & Middle East (CAME) Group. In 2000, Mr. Manwani moved to UK as Senior Vice President for the Global Hair Care & Oral Care Categories,
and in early 2001, he was appointed President Home & Personal Care (HPC), Latin America Business Group. He also served as the Chairman of Unilever’s Latin America Advisory Council. In 2004, he was appointed President and CEO of the HPC North America Business Group, and in April 2005, was elevated to the Unilever Executive as the President Asia & Africa. Mr. Manwani is an Honours Graduate from the Mumbai University and holds a Masters Degree in Management Studies. He has also attended the Advanced Management Program (AMP) at Harvard Business School. Mr. Manwani is a member of the Compensation Committee of the Company.
Directorship in other Companies
/JUJO 1BSBOKQF Managing Director and Chief Executive Officer
Indian School of Business
ING Groep NV
Chairman of Board Committee
Member of Board Committee
-
-
.S /JUJO 1BSBOKQF after obtaining a degree in BE (Mechanical) and MBA in Marketing (JBIMS) from Mumbai, joined the Company as a management trainee in 1987. In his early years in the Company, Mr. Paranjpe worked as Area Sales Manager – Detergents and then Product Manager-Detergents. In April 1996, he became the Branch Manager, Chennai and in February 1999 he was appointed a member of the Project Millennium team. In 2000, he moved to Unilever London, and was involved in a review of the organisation structure. During 2001, he was an executive assistant to the Unilever Chairman & Executive Committee in London. On his return to India in 2002, he became the Category Head – Fabric Wash &
Regional Brand Director (Asia) for some Laundry and Household Cleaning (HHC) Brands. In 2004, he became Vice President - Home Care (Laundry & HHC) India, responsible for the Home Care business. Mr. Paranjpe was appointed as the Executive Director for the Home & Personal Care business in March 2006. Mr. Paranjpe was appointed as Managing Director and Chief Executive Officer of the Company and Group Vice President of Unilever Companies in South Asia, in April 2008. Mr. Paranjpe is a member of the Shareholders/Investors Grievance Committee and Compensation Committee of the Company.
Directorship in other Companies Kimberly Clark Lever Private Limited
18
Hindustan Unilever Limited
Chairman of Board Committee
Member of Board Committee
-
-
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.S % 4VOEBSBN joined the Company in 1975 after qualifying as a cost accountant from ICWA. Mr. Sundaram has also attended the Advanced Management Program (AMP) at Harvard Business School. Having worked in various capacities within the Company, he was seconded to Unilever, London for the period 1990-93. On his return to India, he was the financial member of the TOMCO Integration team and then became the Finance Director of Brooke Bond Lipton India Limited in March 1994. After another round of secondment to Unilever, % 4VOEBSBN Vice Chairman and Chief Financial Officer
London as the Senior Vice President, Finance (Central Asia and Middle East Group) during 1996-99, he returned to the Company in May 1999 as Director, Finance and IT. Mr. Sundaram was elevated as Vice Chairman of the Company in April 2008. Mr. Sundaram was awarded as ‘CFO of the Year’ in FMCG Sector by CNBC-TV 18, for excellence in the financial field for 2006 and 2008. Mr. Sundaram is the member of the Shareholders/Investors Grievance Committee of the Company.
Directorship in other Companies State Bank of India
Brooke Bond Real Estates Private Limited
SBI Capital Markets Limited
Pond’s Exports Limited
Capgemini Business Services (India)
Lakme Lever Private Limited
Limited Unilever India Exports Limited Chairman of Board Committee
Member of Board Committee
SBI Capital Markets Limited (Audit Committee)
-
Pond’s Exports Limited (Audit Committee)
.S % 4 1BSFLI is a B.Com graduate and holds a FCA degree from England and Wales. Mr. Parekh has held senior positions in Grindlays and Chase Manhattan. He is the Executive Chairman of Housing Development Finance Corporation Limited and is a member of several prestigious committees appointed by the Government of India including on Foreign Direct Investment (FDI). Mr. Parekh is a recipient of Padma Bhushan in recognition for his contributions to the national economy and public policy. He has also received several awards including the ‘Finance Asia Lifetime Achievement Award’, in the year 2008, for services to financial
services and banking industry in India and ‘Best Non-Executive Director 2006’ by the Asian Centre for Corporate Governance. Mr. Parekh is widely consulted by the Government on a wide range of issues of national importance and has been a member of various Government appointed committees and advisory panels, which includes financial services, capital markets and infrastructure sector reforms. Mr. Parekh joined the Board of the Company in May 1997. Mr. Parekh is the Chairman of the Audit Committee of the Company.
% 4 1BSFLI Independent Director
Board of Directors’ Profile
Annual Report 2008-09
19
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Directorship in other Companies Housing Development Finance
Castrol India Limited
Corporation Limited Infrastructure Development Finance
The Indian Hotels Company Limited
Company Limited GlaxoSmithKline Pharmaceuticals
Borax Morarji Limited
Limited HDFC Asset Management Company
Zodiac Clothing Company Limited
Limited HDFC ERGO General Insurance
Bharat Bijlee Limited
Company Limited HDFC Standard Life Insurance
Exide Industries Limited
Company Limited Siemens Limited
Satyam Computer Services Limited
Mahindra & Mahindra Limited
Lafarge India Private Limited
Hindustan Oil Exploration Company Limited Chairman of Board Committee
Member of Board Committee
Castrol India Limited (Audit Committee)
Infrastructure Development Finance
GlaxoSmithKline Pharmaceuticals
Company Limited (Remuneration
Limited (Audit Committee and
Committee)
Investors/Shareholders Grievance
Siemens Limited (Audit Committee and
Committee)
Remuneration Committee)
Mahindra & Mahindra Limited (Audit
The Indian Hotels Company Limited
Committee)
(Audit Committee)
1SPG $ , 1SBIBMBE is the Paul and Ruth McCracken distinguished University Professor of Corporate Strategy at the University of Michigan. He received his Doctorate of Business Administration from the Harvard Business School. Prof. Prahalad specialises in corporate strategy and has authored several books and numerous articles in reputed journals. His contribution to business strategy is
globally recognised. Prof. Prahalad has been honoured with Padma Bhushan, the country’s third highest civilian honour for his contribution in the field of literature and education. He joined the Board of the Company in April 2000. Prof. Prahalad is a member of the Audit Committee and Remuneration Committee of the Company.
Directorship in other Companies
$ , 1SBIBMBE Independent Director
20
Hindustan Unilever Limited
NCR Corporation
Pearson PLC
Chairman of Board Committee
Member of Board Committee
-
NCR Corporation (Audit Committee)
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.S " /BSBZBO joined ICI India as a Management Trainee in 1973 and grew through diverse functions and businesses before being appointed as the Managing Director of ICI India in 1996. On completion of his term as the Managing Director in ICI India, he was appointed as the Non-Executive Chairman of ICI India. Just prior to this appointment he served as a Corporate Planning Manager at the ICI Group Head
Quarters in London. A B.Tech. from IIT Kanpur, he also has formal qualifications in law, interdisciplinary sciences and strategic management. He joined the Board of the Company in 2001. Mr. Narayan is the Chairman of Shareholders/Investors Grievance Committee, Remuneration Committee and a member of Audit Committee of the Company.
Directorship in other Companies ICI India Limited " /BSBZBO Independent Director
Chairman of Board Committee
Member of Board Committee
-
-
.S 4 3BNBEPSBJ is the Chief Executive Officer and Managing Director of Tata Consultancy Services Limited; Chairman of Tata Technologies Limited and Chairman of CMC Limited. Holder of a Bachelor Degree in Physics from Delhi University, a Bachelor of Engineering Degree in Electronics and Telecommunications from Indian Institute of Science, Bangalore; and a Masters Degree in Computer Science from the University of California, USA. Mr. Ramadorai took the Senior Executive Development Program at MIT’s Sloan School of Management in 1993. Mr. Ramadorai joined the Board of the 4 3BNBEPSBJ Independent Director
Company in May 2002. Mr. Ramadorai was conferred the prestigious Padma Bhushan by the President of India in recognition of his contributions to trade and public policy of the country. During 2008, Mr. Ramadorai was recognised as the ‘International CEO of the Year’ at the 14th Annual LT Bravo Business Awards and the ‘Asia Talent Management of the Year’ at CNBC’s 7th Asia Business Leader Award. Mr. Ramadorai is the member of Audit Committee and Remuneration Committee of the Company.
Directorship in other Companies Tata Industries Limited
Tata Consultancy Services Limited
Tata Elxsi Limited
Tata Communication International Pte Limited
Tata Technologies Limited
C-Edge Technologies Limited
WTI Advanced Technology Limited
Tata America International Corporation
Innova TV Inc.(USA)
Tata Teleservices (Maharashtra) Limited
CMC Limited
Computational Research Laboratories Limited
Piramal Healthcare Limited
Tata Consultancy Services BPO Chile S.A.
TCS Iberoamerica SA. (Uruguay)
ACCION Technical Advisors India
Tata Consultancy Services De Espana SA (Spain)
Tata Communications Limited
Tata Consultancy Services Chile SA (Chile)
Board of Directors’ Profile
Annual Report 2008-09
21
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Chairman of Board Committee
Member of Board Committee
Tata Technologies Limited (Audit Committee and Remuneration Committee)
Tata Consultancy Services Limited (Investors/Shareholders Grievance Committee) Tata Elxsi Limited (Audit Committee and Remuneration Committee)
3 " .BTIFMLBS Independent Director
%S 3 " .BTIFMLBS is presently the President of Global Research Alliance, a network of publicly funded R&D institutes from Asia-Pacific Europe and USA. Dr. Mashelkar served as the Director General of Council of Scientific and Industrial Research (CSIR) for over eleven years. He was also the President of Indian National Science Academy (INSA) and the President of Institution of Chemical Engineers. Dr. Mashelkar is only the third Indian engineer to have been elected as the Fellow of Royal Society (FRS), London in the twentieth century. Twenty-seven universities have honoured Dr. Mashelkar with honorary doctorates, which include Universities of London, Salford, Pretoria, Wisconsin and Delhi. In 1998, Dr. Mashelkar won the JRD Tata Corporate Leadership Award, the first scientist to win it. In 2005, Dr. Mashelkar became the first Asian scientist to receive the award of ‘Stars of Asia’ at the hands of George Bush (Sr.), the former President of USA. As the Chairman of the Standing
Committee on Information Technology of World Intellectual Property Organisation (WIPO), as a member of the International Intellectual Property Rights Commission of UK Government and as the Vice Chairman on Commission in Intellectual Property Rights, Innovation and Public Health (CIPIH) set up by World Health Organisation (WHO), he brought new perspectives on the issue of IPR and the developing world concerns. Dr. Mashelkar has won over 50 awards and medals in the field of science and technology and was honoured by the President of India with Padmashri (1991) and with Padmabhushan (2000), which are two of the highest civilian honours in India, in recognition of his contribution to nation building. Recently Dr. R.A. Mashelkar has won the ‘Punyabhushan Award’ at the hands of the legendary Dr. A.P.J. Abdul Kalam. Dr. Mashelkar joined the Board of the Company in April 2008. Dr. Mashelkar is a member of the Audit Committee and Remuneration Committee of the Company.
Directorship in other Companies ICICI Knowledge Park
KPIT Cummins Infosystems Limited
Reliance Industries Limited
Sakal Papers Limited
TATA Motors Limited
Piramal Life Sciences Limited
Thermax Limited Chairman of Board Committee
Member of Board Committee
-
Tata Motors Limited (Audit Committee) KPIT Cummins Infosystems Limited (Remuneration Committee)
22
Hindustan Unilever Limited
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.S %IBWBM #VDI joined the Company as a Management Trainee in June 1984. Mr. Buch has held a series of assignments in Manufacturing, Household Care Category and New Ventures including a stint with Unilever in UK during 1993-95. He was a member of Project Millennium, a key
organisational initiative. In June 2005, Mr. Buch was appointed as Vice President – Technical (HPC) and in 2006 was appointed as an Executive Director Supply Chain. Mr. Buch was elevated to the Board of Directors of the Company in April 2008.
Directorship in other Companies Unilever Industries Private Limited
Levers Associated Trust Limited
Unilever Nepal Limited Chairman of Board Committee
Member of Board Committee
-
-
%IBWBM #VDI Executive Director, Supply Chain
.S (PQBM 7JUUBM an alumnus of Madras Christian College, completed his MBA from IIM, Kolkata. Mr. Vittal has 18 years experience in Marketing & Sales in FMCG market including Skin Care, Soaps and Laundry. He has worked both in India and Asia for Unilever for over 16
years, following which Mr. Vittal was the Marketing Director at Bharti Airtel for a period of 2 years leading the Marketing and Distribution strategy for the group. He rejoined the Company in July, 2008 as the Executive Director for Home & Personal Care business.
Directorship in other Companies Unilever India Exports Limited
Kimberly Clark Lever Private Limited
Chairman of Board Committee
Member of Board Committee
-
-
(PQBM 7JUUBM Executive Director, Home and Personal Care
Board of Directors’ Profile
Annual Report 2008-09
23
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.BOBHFNFOU $PNNJUUFF
Nitin Paranjpe Managing Director and Chief Executive Officer
D. Sundaram Vice Chairman and Chief Financial Officer
Shrijeet Mishra Executive Director, Foods
Ashok Gupta Executive Director, Legal and Company Secretary
Dhaval Buch Executive Director, Supply Chain
Gopal Vittal Executive Director, Home and Personal Care
Hemant Bakshi Executive Director, Sales and Customer Development
Leena Nair Executive Director, Human Resources
24
Hindustan Unilever Limited
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/05*$& of the Annual General Meeting Notice is hereby given that the 76th Annual General Meeting of Hindustan Unilever Limited will be held on Friday, 3rd July, 2009 at 2.30 P.M. at Birla Matushri Sabhagar, 19, Marine Lines, Mumbai 400 020, to transact the following businesses: 309 and other applicable provisions, if any, of the Companies Act, 1956 read with Schedule XIII to the Act, as amended, the approval of Members of the Company be and is hereby accorded to the appointment of Mr. Dhaval Buch as the Wholetime Director of the Company, liable to retire by rotation in terms of the provisions of the Articles of Association of the Company.
ORDINARY BUSINESS 1. To receive, consider and adopt the Audited Profit and Loss Account for the fifteen month period ended 31st March, 2009, the Balance Sheet as at that date and the Reports of the Directors and Auditors thereon. 2.
To confirm the payment of Interim Dividend and to declare a Final Dividend on Equity Shares for the fifteen month period ended 31st March, 2009.
3.
To elect and appoint Directors in place of the Directors retiring by rotation.
4.
To appoint M/s. Lovelock & Lewes, Chartered Accountants, Mumbai as Statutory Auditors of the Company, to hold office from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting and to fix their remuneration for the year ending 31st March, 2010.
RESOLVED FURTHER THAT the remuneration of Mr. Dhaval Buch in his capacity as a Wholetime Director be fixed by the Board or a duly constituted committee thereof and thereafter be revised from time to time, within the limits as approved by the Members by way of a Special Resolution adopted at their meeting held on 4th April, 2008.” 9.
“RESOLVED THAT pursuant to the provisions of Sections 198, 269, 309 and other applicable provisions, if any, of the Companies Act, 1956 read with Schedule XIII to the Act, as amended, the approval of Members of the Company be and is hereby accorded to the appointment Mr. Gopal Vittal as the Wholetime Director of the Company, liable to retire by rotation in terms of the provisions of the Articles of Association of the Company.
SPECIAL BUSINESS 5. To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Section 257 and all other applicable provisions, if any, of the Companies Act, 1956, Mr. Dhaval Buch, who was appointed as an Additional Director of the Company pursuant to the provisions of Section 260 of the Companies Act, 1956, be and is hereby appointed as Director of the Company, liable to retire by rotation in terms of the provisions of the Articles of Association of the Company.” 6.
To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution:
RESOLVED FURTHER THAT the remuneration of Mr. Gopal Vittal in his capacity as a Wholetime Director be fixed by the Board or a duly constituted committee thereof and thereafter be revised from time to time, within the limits as approved by the Members by way of a Special Resolution adopted at their meeting held on 4th April, 2008.” 10. To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Sections 198, 269, 309 and other applicable provisions, if any, of the Companies Act, 1956 read with Schedule XIII to the Act, as amended, the approval of Members of the Company be and is hereby accorded to the appointment Mr. Sridhar Ramamurthy as the Wholetime Director of the Company, liable to retire by rotation in terms of the provisions of the Articles of Association of the Company.
“RESOLVED THAT pursuant to the provisions of Section 257 and all other applicable provisions, if any, of the Companies Act, 1956, Mr. Gopal Vittal, who was appointed as an Additional Director of the Company pursuant to the provisions of Section 260 of the Companies Act, 1956, be and is hereby appointed as Director of the Company, liable to retire by rotation in terms of the provisions of the Articles of Association of the Company.” 7.
8.
RESOLVED FURTHER THAT the remuneration of Mr. Sridhar Ramamurthy in his capacity as a Wholetime Director be fixed by the Board or a duly constituted committee thereof and thereafter be revised from time to time, within the limits as approved by the Members by way of a Special Resolution adopted at their meeting held on 4th April, 2008.”
To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Section 257 and all other applicable provisions, if any, of the Companies Act, 1956, Mr. Sridhar Ramamurthy, be and is hereby appointed as Director of the Company, liable to retire by rotation in terms of the provisions of the Articles of Association of the Company.” To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Sections 198, 269,
To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution:
Notes: 1.
An Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956, relating to the Special Businesses to be transacted at the meeting is annexed hereto.
2.
In accordance with the Articles of Association of the Company,
Notice of the AGM
Annual Report 2008-09
25
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/05*$& of the Annual General Meeting all Directors (except Mr. Nitin Paranjpe who has been elected as Managing Director for a term of 5 years effective from 4th April, 2008), retire every year and, if eligible, offer themselves for re-appointment at every Annual General Meeting. The relevant details of Directors seeking appointment/ re-appointment as Directors under item nos. 3, 5, 6 and 7 above, are provided at page nos 18 to 23 of this Report. 3.
4.
The Members, at the Annual General Meeting held on 4th April, 2008, had approved the remuneration of the Statutory Auditors of the Company for the year ending 31st December, 2008. No increase is proposed in the remuneration paid last year on account of fifteen months annual accounts. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE ON HIS/HER BEHALF, AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. The instrument of proxy in order to be effective, should be deposited at the Registered Office of the Company, duly completed and signed, not later than 48 hours before the commencement of the meeting. A Proxy Form is sent herewith. Proxies submitted on behalf of the limited companies, societies, etc., must be supported by an appropriate resolution/authority, as applicable.
5.
The Register of Members and Share Transfer Books of the Company will remain closed from Tuesday, 16th June, 2009 to Thursday, 2nd July, 2009 (both days inclusive).
6.
The final dividend for the fifteen month period ended 31st March, 2009 as recommended by the Board, if approved at the meeting, will be paid on or after Monday, 6th July, 2009 to those Members whose names appear in the Company’s Register of Members as on the book closure dates.
7.
8.
9.
Members holding shares in electronic form are hereby informed that bank particulars registered against their respective depository accounts will be used by the Company for payment of dividend. The Company or its Registrars cannot act on any request received directly from the Members holding shares in electronic form for any change of bank particulars or bank mandates. Such changes are to be advised only to the Depository Participant of the Members. Members holding shares in electronic form are requested to intimate immediately any change in their address or bank mandates to their Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physical form are requested to advise any change of address immediately to the Company/ Registrar and Share Transfer Agents, M/s. Karvy Computershare Private Limited. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested to submit the PAN to their Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physical form can submit
26
Hindustan Unilever Limited
their PAN details to the Company/Registrar and Share Transfer Agents, M/s. Karvy Computershare Private Limited. 10. For convenience of Members and for proper conduct of the meeting, entry to the place of meeting will be regulated by attendance slip, which is annexed to the Annual Report. Members are requested to sign at the place provided on the attendance slip and hand it over at the entrance of the venue. 11. Shareholders desiring any information relating to the accounts are requested to write to the Company at an early date so as to enable the management to keep the information ready. Registered Office: 165/166, Backbay Reclamation, Mumbai 400 020.
10th May, 2009
By Order of the Board
(Ashok Gupta) Company Secretary
EXPLANATORY STATEMENT ITEM NOS. 5, 6, 8 and 9 The Board of Directors of the Company had appointed Mr. Dhaval Buch and Mr. Gopal Vittal as Additional Directors of the Company with effect from 4th April, 2008 and 1st September, 2008 respectively. As per the provisions of Section 260 of the Act, these Directors hold office only up to the date of the forthcoming Annual General Meeting of the Company, and are eligible for appointment as Directors. The Board had also appointed Mr. Dhaval Buch as Executive Director, Supply Chain and Mr. Gopal Vittal as Executive Director, Home and Personal Care with effect from 4th April, 2008 and 1st September 2008 respectively, which is subject to the approval of the Members. The Company has received Notices under Section 257 of the Act from certain members of the Company, in respect of the above candidates, proposing their appointment as Directors of the Company liable to retire by rotation, along with the requisite deposit. A brief resume of these Directors, nature of their expertise in specific functional areas, names of companies in which they hold Directorships and Memberships/ Chairmanship of Board Committees are provided at page no. 23 of this Report. In so far as the remuneration of Mr. Dhaval Buch and Mr. Gopal Vittal as a Wholetime Director of the Company is concerned, the shareholders have by a Special Resolution at the Annual General Meeting held on 4th April, 2008 approved the maximum limits within which the authority has been delegated to the Board to fix the remuneration of the Wholetime and Managing Directors of the Company. Mr. Dhaval Buch and Mr. Gopal Vittal may be deemed to be concerned or interested in the resolutions relating to their respective appointment. The Board accordingly recommends the Ordinary Resolutions set out at item nos. 5,6,8 and 9 of the accompanying Notice for the approval of the Members.
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/05*$& of the Annual General Meeting ITEM NOS. 7 & 10 Mr. D. Sundaram, Vice Chairman and CFO of the Company has decided to retire from services of the Company and therefore, will not be seeking re-appointment in the ensuing Annual General Meeting of the Company. To fill up the vacancy caused by the retirement of Mr. D. Sundaram, it is proposed to appoint Mr. Sridhar Ramamurthy as Executive Director Finance and IT of the Company. Mr. Sridhar Ramamurthy (44) is a Chartered Accountant (Gold Medallist) as well as a Cost Accountant and Company Secretary. He is a Commerce graduate from R. A. Podar College, Mumbai. He joined the Company in May 1989 and worked in a number of finance and commercial functions in India till December 2002 - spanning Internal Audit, Factory Commercial, Post-acquisition Integration of TOMCO with HLL, Supply Chain and Corporate Accounts. In January 2003, Mr. Sridhar moved to Singapore to take up the position of VP Finance and Controller, Home and Personal Care Business Group for Unilever in Asia. Mr. Sridhar’s role expanded over the years with the changes to the Unilever organisation during 2005- 2008. His last assignment in the Group before coming to India was that of VP Finance and Controller, Unilever Asia, Africa, Middle
East, Turkey, Central & Eastern Europe (AACEE), the largest of the 3 regions in Unilever with a turnover of c. € 15 bn. Prior to joining Unilever, Mr. Sridhar worked for 3 years with Larsen & Toubro Limited as Accounts Officer. Mr. Sridhar is a Director on the Board of Unilever India Exports Limited. The Company has received Notice under Section 257 of the Act from a member of the Company, proposing the appointment of Mr. Sridhar Ramamurthy as a Director of the Company liable to retire by rotation, along with the requisite deposit. In so far as the remuneration of Mr. Sridhar Ramamurthy as a Wholetime Director of the Company is concerned, the shareholders have by a Special Resolution at the Annual General Meeting held on 4th April, 2008 approved the maximum limits within which the authority has been delegated to the Board to fix the remuneration of the Wholetime and Managing Directors of the Company. None of the Directors of the Company except Mr. Sridhar Ramamurthy are concerned or interested in the said Resolution. The Board accordingly recommends the Ordinary Resolutions set out at item nos. 7 and 10 of the accompanying Notice for the approval of the Members.
DIRECTORS’ INTEREST The Directors of the Company may be deemed to be concerned or interested in the Special Businesses as set out in the Notice to the extent of shares held by them in the Company as appear in the table below : Name of the Director
No. of Shares
% Holding
Harish Manwani
22,130
0.001
Nitin Paranjpe
23,056
0.001
D. Sundaram
22,020
0.001
D. S. Parekh
38,250
0.002
Nil
N.A.
Prof. C. K. Prahalad Aditya Narayan
Nil
N.A.
S. Ramadorai
Nil
N.A.
Dr. R. A. Mashelkar
Nil
N.A.
Dhaval Buch
15,153
0.001
Gopal Vittal
2,300
0.00
Sridhar Ramamurthy
1,146
0.00
Registered Office: 165/166, Backbay Reclamation, Mumbai 400 020.
By Order of the Board
(Ashok Gupta) Company Secretary
10th May, 2009
Notice of the AGM
Annual Report 2008-09
27
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%*3&$5034’ 3&1035 "/% ."/"(&.&/5 %*4$644*0/ "/"-:4*4 To the Members, Your Company’s Directors are pleased to present the 76th Annual Report of the Company along with the audited accounts for the fifteen month period ended 31st March, 2009. You are aware that the Accounting year of the Company was changed from Calendar Year (January-December) to Financial Year (April-March), to avoid duplication in preparation and audit of accounts under the Companies and Income Tax Acts. This change simplifies the process, thereby saving cost and time. Consequently, the current Annual Accounts and Report of the Company are for a period of fifteen months, from 1st January, 2008 to 31st March, 2009; these figures, therefore, are not comparable with those of previous year ended 31st December, 2007.
1.
FINANCIAL PERFORMANCE 1.1.
Rs. lakhs
Results
Turnover, net of excise
Fifteen Months Period ended 31st March, 2009
Twelve Months Period ended 31st December, 2007
20239,33
13675,43
Profit before tax
3025,12
2146,33
Net profit
2496,45
1925,47
(1912,29)
(2331,62)
(250,00)
(200,00)
531,66
197,50
Dividend (including tax on distributed profits) Transfer to General Reserve Profit & Loss account balance carried forward 1.2.
Rs. lakhs
Category wise Turnover Fifteen Months Period ended 31st March, 2009
Twelve Months Period ended 31st December, 2007
Sales
Others*
Sales
Others*
Soaps and Detergents
9770,26
110,30
6328,80
71,13
Personal Products
5272,31
95,13
3614,76
71,83
Beverages
2272,29
22,17
1520,40
20,23
Foods
791,25
19,45
532,98
7,13
Ice Creams
229,44
5,70
158,49
3,01
Exports
1567,29
8,41
1342,26
6,71
Others
344,41
16,56
184,56
42
(6,82)
-
13675,43
180,46
Less : Inter segment revenue Total
(7,92) 20239,33
277,72
*Other revenue represents service income from operations, relevant to the respective businesses
28
Hindustan Unilever Limited
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1.3.
they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and
Summarised Profit and Loss Account Rs. lakhs (except EPS)
Net sales Other operational income Total Operating costs and expenses PBDIT Depreciation PBIT Interest Income (net) PBT Taxation PAT (before exceptional items) Exceptional items (net of tax) Net profit
Fifteen Months Period ended 31st March, 2009
Twelve Months Period ended 31st December, 2007
20239,33
13675,43
362,23
193,66
20601,56
13869,09
(17561,37)
(11796,77)
3040,19
2072,32
(195,30)
(138,36)
2844,89
1933,96
180,23
212,37
3025,12
2146,33
(524,41)
(403,21)
2500,71
1743,12
(4,26)
182,35
2496,45
1925,47
they have prepared the annual accounts on a going concern basis. 4. MANAGEMENT DISCUSSION & ANALYSIS In order to avoid duplication between the Directors’ Report and Management Discussion and Analysis, we present below a composite summary of performance of the various businesses and functions of the Company.
Basic EPS (Rs.)
11.46 8.73 For the fifteen month period ended 31st March, 2009, the Company registered an overall turnover growth of 48%; Profit After Tax registered a growth of 43% and Net Profit (after Exceptional Items) by 30%. Basic Earnings Per Share for the period 2008-09 was Rs 11.46.
2. DIVIDEND Directors are pleased to recommend a final dividend of Rs.4/- per equity share of the face value of Re. 1/- for the period ended 31st March, 2009. The interim dividend of Rs. 3.50 per equity share was paid on 18th August, 2008. The final dividend, subject to approval at the AGM on 3rd July, 2009, will be paid to the shareholders whose names appear on the Register of Members with reference to the book closure from 16th June, 2009 to 2nd July, 2009 (inclusive of both dates) The total dividend for the period including the proposed final dividend amounts to Rs. 7.50 per share and
will absorb Rs. 1912.13 crores including Dividend Distribution Tax of Rs. 277.76 crores. 3. RESPONSIBILITY STATEMENT The Directors confirm that: in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from same; they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for that period;
Directors’ Report and Management Discussion & Analysis
4.1 Economy and Markets World economy was severely impacted by the US financial crisis, with its contagion effect across countries. Global trade was affected with reduced exports from Developing & Emerging (D & E) countries like India and China. India was one of the few large economies that registered a robust growth in GDP at 7% for 2008-09. Country benefited from a near normal monsoon, reflecting in agriculture growing by 2.6%. Rural economy was also buoyed by Government spendings, employment schemes and higher food prices. While services sector continued to grow at a healthy rate, industrial production registered significant slow down, impacted by the global recession. Country’s GDP growth for the second half of 2008-09 was lower compared to the first half. Slow down was witnessed in capital goods, consumer durables, automotives, aviation and the like,
Annual Report 2008-09
29
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although FMCG markets somewhat held their value growth levels. There was pressure on volumes in categories like Soaps and Detergents, with signs of downtrading across segments. Government including Reserve Bank of India, launched fiscal and monetary measures to boost credit, investment and consumption. FMCG sector benefited from significant reduction in excise duty rates on finished goods. The year 2008 also witnessed high levels of volatility in commodity prices, essentially led by petroleum crude. Vegetable fats, chemicals and packaging materials also reflected this price volatility, causing stress in business planning processes. Wholesale price inflation touched high levels during the year, before decelerating sharply towards the later part of the year under review. Your Company’s good performance for the period 2008-09 has to be seen in the context of above economic background. PERFORMANCE OF DIVISIONS/ CATEGORIES Some highlights are given below in respect of each of the business categories of the Company. Increase / growth percentages refer to a period of 15 months over the base of 12 months. 4.2 Home & Personal Care Business (HPC) The business comprises Personal Wash, Fabric Wash, Household Care and Personal Care categories. The business recorded a growth of 51%. This was broad based and across categories and was achieved in the face of two major challenges; Competition continued to be intense, both from existing and new
30
Hindustan Unilever Limited
players. Your Company responded through increased brand investments, value enhancing innovations and powerful market activation. Volatile commodity markets with petroleum crude prices at c.$ 90 per barrel at the beginning of 2008 peaking to $ 147 per barrel before dropping to levels of c.$ 50. The severe impact of cost inflation was felt in inputs like vegetable oils, laundry chemicals, packaging and freight. Robust planning systems and strong dynamic performance management processes helped the business manage this volatility. Judicious and sensible price increases, together with continued aggressive cost savings programme enabled competitiveness of Company’s brands in the market place. Benefit due to reduction in excise duty rates from 14% to 8% in two phases (in December 2008 and February 2009) was pooled and passed on to consumers through price reduction in select packs. Potential for growth in all categories of Home and Personal Care is high, given the current low levels of per capita consumption. Directors believe that sustained investments behind brands by way of technology, innovations and consumer communication will benefit the business in creating value. 4.2.1 Soaps & Detergents Soaps and Detergents category recorded a robust sales growth of 54% with a slight drop in annual segmental margin by 20 bps. This needs to be seen in the backdrop of high and volatile input costs and competitive pressures. With the softening of crude oil prices and the consequent easing of input material
costs, product prices have been recalibrated to enhance market competitiveness and grow volumes. Fabric Wash continued its growth momentum despite experiencing severe cost pressures. All brands across price segments, Surf, Rin, Sunlight and Wheel delivered strong value and volume growth. Wheel became the largest detergent brand of India with annual turnover exceeding Rs. 2000 crores. Wheel Gold was successfully launched, providing better wash performance at affordable prices to drive upgradation of consumers. Surf franchise continued to do well with both, bar and powder, reporting growth. Rin Powder was re-launched during the year with superior formulation and proposition, and was extended to washing machine segment with the launch of Rin Matic. Sunlight grew well in its stronghold markets. Cost pressure in the category was managed through judicious price increases on premium products, but price point affordability was retained in mass segment for the low income consumers by appropriately adjusting fill levels. In Household Care, Vim liquid, a convenient premium dish wash product was re-launched in a highly efficient gel formulation; it is receiving good consumer response. In surface cleaning, Domex continued to grow and doubled sales. Strong marketing activities established Domex as a powerful proposition for floor and toilet cleaning. Personal Wash category faced a steep rise in vegetable/palm oil prices during the course of the year. Competition from existing and new players has been intense.
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The category was managed through multi-pack offerings, consumer promotions and moderate price increase in low unit price packs. Lifebuoy grew on the back of small and multi packs. Re-launch of Lux in variants like Strawberry and Peach supported by a new thematic communication enabled the brand to grow well. Dove and Pears grew ahead of the market in the premium category. We will leverage all our brands in this category to drive growth. 4.2.2 Personal Products Personal Products include categories like hair care, skin care, toothpaste and brush, deodorants and colour cosmetics. In Hair Care, HUL maintained the leadership position in Shampoo with its powerful brand portfolio, addressing consumer needs across the income pyramid. Price points were carefully maintained in the context of inflationary pressures. The premium Dove shampoo and conditioners range launched during 2007, reported very good growth through a combination of high quality advertising and actions in the market place. Clinic Plus continued to grow and strengthened its position as the single largest shampoo brand. Sunsilk range was re-launched with further improvements to product quality and packaging. Clinic All Clear is being re-launched to regain its earlier position. Rapid progress is being achieved in driving the emerging and high potential hair conditioner segment. Skin Care category continued to witness intense activities in the market across income segments. Share of high value premium products
is also increasing; this has excellent potential for HUL through Pond’s top end products. In mass skin lightening category, Fair & Lovely delivered strong growth. A consumer friendly pack format at affordable price was introduced; this will help to upgrade sachet users to tube format. In premium category, Pond’s increased its consumer base with good offerings in anti-ageing and skin lightening segments. Modern Trade and specialist distribution channels helped in upgrading consumers to premium products. Lakmé Skin Care range performed well. Vaseline launched newer formulations in body lotions offering relevant consumer benefits like moisturisation. Talcum powders continued to do well. In Oral category, Close-up performed very well, led by the re-launch in September 2008, recording growth ahead of the market for the third year in a row. Pepsodent underperformed and appropriate actions are being taken to drive the performance of the brand in 2009. The Lakmé range of Colour Cosmetics grew well. New innovations like aqua shine lip colour, summer and winter collections were well received by the consumers. Lakmé Fashion Week continues to be a signature campaign for the brand. In countries like India, Deodorants business has excellent potential for growth given the low user base currently. Investment behind Axe Deodorant was significantly enhanced. Special edition packs and memorable media campaigns support the brand. The category, however, continues to suffer from duplicates and illegal imports. We
Directors’ Report and Management Discussion & Analysis
are addressing this issue holistically through consumer information and working with industry bodies for effective enforcement of laws by agencies concerned. Going forward, we will deploy the totality of the portfolio to sustain growth of this key category. Kimberly Clark Lever Pvt Ltd (KCLL) KCLL is a Joint Venture between HUL (50% equity) and Kimberly Clarke Corp., USA (50% equity) and is engaged in infant care and feminine care products under brands like Huggies and Kotex. These products are sold through HUL distribution system and delivered a good underlying volume growth. New products were introduced at different price points for further developing the market. The Joint Venture is profitable and has been paying dividends for the past few years. 4.3 Foods HUL’s Foods portfolio comprises Beverages (Tea and Coffee), Processed Foods (Kissan, Knorr and Annapurna range of products), Ice Cream and Bakery products (Modern Foods). The business sustained its growth momentum of the last three years. The growth has been broad based, competitive and profitable. Delivering product freshness continued to receive utmost priority and several actions have been taken to further reinforce the work already done. Beverages like Tea and Coffee are well entrenched habits among Indian consumers with further potential for higher per capita consumption. However, processed foods is a small fraction of the large foods market and hence offers huge
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potential for companies like HUL. The processed foods opportunity is at an inflexion point in India. With a formidable array of brands (across hot and cold formats, in-house and out-of-home segments), strong research, development and technology support from Unilever and your Company’s intimate understanding of Indian consumers, we are well positioned to benefit from the thrust on Foods categories. 4.3.1 Processed Foods Kissan is one of the most trusted Foods brands among Indian consumers. The growth in Kissan portfolio, supported by successful innovations, was good. Jam squeeze launched in September quarter was attractive to children. New packaging formats in Ketchup such as value packs and kids friendly upside down squeezable pack were received very well. Kissan continued to maintain its leadership position in Jams and achieved strong shares in Ketchup segment. The Knorr proposition was extended through Indian range of soups and ready to cook recipes. These have been well received in the market. The staples business (Annapurna salt and flour) was impacted in the first half of 2008 on account of supply issues. These have since been addressed, helping the business achieve good growth. There has been a significant improvement in the profitability of the business on the back of supply chain savings and improved product mix. ‘Amaze’ brain food is in test market phase in three Southern states. 4.3.2 Beverages Consumers of Tea continued to upgrade from loose tea to branded
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Hindustan Unilever Limited
packet tea, which now accounts for some 40% of total domestic tea consumption. Packet Tea market remains extremely competitive. The tea business delivered well with good volume gains and further strengthened its value leadership position. The market shares increased across brands. Focussed marketing initiatives undertaken in key geographies have delivered good results. Tea prices continued to rule high necessitating selective price increases across packs and brands. Margins were managed through a combination of pricing and supply chain cost savings. 3 Roses Mindsharp was launched to offer the consumer the goodness of ayurvedic ingredients like brahmi and badam which help to achieve relaxed yet alert state of mind. Taj tea bags were relaunched in Ginger, Cardamom and Lemon flavours. The business is currently test marketing a new product under the brand ‘Brooke Bond Sehatmand’, offering nutritional benefits like vitamins to tea consumers. Lipton has been relaunched and continues to grow strongly in the out of home segment through acquisition of new accounts and expansion of vending machines, gaining a wider national footprint. Coffee business led by Bru Instant Coffee registered a good growth in 2008. Bru was re-launched in the second half of 2008 focussing on aroma delivery (through aroma lock) and improved sensorials, backed by strong media campaigns and trade activations program. Cappuccino business continued to add new consumers in non-south geographies both in hot and ice cool variants. We will continue to focus on building growth in Instant Coffee, consolidate
our position in ‘roast and ground’ segment and drive premiumisation of the portfolio. Out-of-home consumption is one of the key value drivers for the business, by providing consumers with a refreshing experience of branded beverages while they are out of home – at work or wait or play. We will continue to drive aggressive growth in this channel through required investments. 4.3.3 Ice Creams Ice Cream business sustained its growth momentum and delivered strongly; both impulse and take home segments delivered well. Underlying profitability continued to improve with increasing scale and better operational efficiencies. The business fully uses its unlimited access to Unilever’s portfolio of brands and innovations to offer exciting products, suitable to Indian consumers. Gelato, a premium take home product was introduced with two variants – Tiramisu and Nochiola and has shown encouraging results. Further, a range of innovations in Cornetto such as ‘Almond Praline’ and ‘Choco Brownie’ has been introduced in the impulse segment; Cornetto cone variants called ‘Black Forest’ and ‘Strawberry Tease Cake’ were launched successfully. Attention to expansion of cabinets infrastructure for increasing availability, improved customer service and strong brand communication have ensured that the business continues to perform well. 4.3.4 Bakery (Modern Foods) Bakery (bread and cakes) grew strongly through a combination of higher volumes, better product mix
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and judicious pricing. Profitability has also improved over the years. Merger synergies are being realised through centralised buying for key materials and adoption of good manufacturing practices. 4.4
Exports Business
Continuing portfolio of Exports comprising FMCG and Specialty Exports grew strongly. Margins improved reflecting the benefits of a rationalised product portfolio and appropriate restructuring. All categories recorded good value growth leveraging on the high commodity prices. Your Company also earned the reputation for delivering excellent levels of customer service. HPC Exports reported handsome growth driven by Skin and Hair categories. Investments in Kandla unit helped to develop the site into a world class competitive sourcing location for HPC products, particularly high range Skin Care products. Kandla unit secured international certification from US FDA and the Canadian Ministry of Health. Skin care exports to Arabia, Malaysia and Sri Lanka performed very well, thanks to good demand. Oral turnover growth was flat as toothpaste sourcing for Europe dried up following their move of onshore production. Pears franchise continued its good performance across many countries. Foods and Beverages exports improved its profitability with parts of portfolio rationalised, mainly by way of stoppage of Bulk tea and raw coffee bean exports. The continuing businesses performed well; value added tea bags segment grew strongly. Efforts to increase the
coverage of Instant Tea exports to Europe were successful. Export of 3 in 1 tea premix to Arabia has also been received well. Culinary products like soups and jams show promise with turnover doubling, albeit on a small base.
HUL shareholders have already approved the divestment of this business, but we are yet to find a suitable buyer. In the meantime, steps are being taken continuously to improve the performance and profitability of the business.
In Specialty Exports, Marine business reported profits, benefiting from very favourable market conditions for Surimi. Crabstick business continued steady growth and profitability with a widened customer base. Rice business reported good growth of turnover and profits driven by strong brand positions in Indus Valley and Rozana especially in the Gulf markets.
4.5 Water Pureit is a unique in-home drinking water purification system, offering water ‘as safe as boiled’, thereby protecting children and families from waterborne diseases. It is the only purifier in the world that provides this level of safety without depending on cooking gas, electricity and pressurised tap water, and is affordably priced.
Your Company will continue to focus on value added FMCG exports and drive international competitiveness to deliver growth.
Following awards for Pureit during the year reflect the high public recognition for the same: Golden Peacock product innovation award,
Leather (Pond’s Exports Limited) Leather Exports had a difficult year due to forex volatility and recessionary conditions in Europe. India’s competitive advantages of good quality leather and the ability to service small orders were neutralised by China’s significant cost advantages and a well developed market for components. The shoeupper business continued to deliver profits. In the shoes segment, major markets in the European Union were price sensitive, with some key customers switching to low cost locations. In order to achieve cost competitiveness and remain viable, the Company has taken steps to restructure the high cost manufacturing facility at Puducherry. Collaboration with a Design Centre in China to provide a stream of new designs and cost effective components has been helpful.
Directors’ Report and Management Discussion & Analysis
Innovation award in India from the United Kingdom Trade and Investment organisation, and Water Digest award supported by UNESCO for the best domestic nonelectric water purifier. Pureit has been nationally extended with its footprint in 28 states. The business has developed a unique customer acquisition system and strong capabilities in supply chain and customer service. More than one million units of Pureit were sold during the period of April 2008 to March 2009; sales turnover of the business was Rs. 190 crores for this period. The business is in an investment phase, we continue to commit resources in this business, mainly to fund brand development and sales infrastructure. The potential for the business is high given the critical need for clean water at low cost.
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4.6 Hindustan Unilever Network The strategy of the network is redefined in line with its vision of empowering modern Indian woman by serving her with superior beauty and healthcare products through customised and professional services. Accordingly the network channel has been repositioned, to offer premium products in the two growing categories of Beauty Solutions and Health & Wellness, under two core brands viz. Aviance and Ayush respectively. This is an important channel and the key challenge to drive the business to scale through outstanding execution remains. 4.7 Beauty & Wellness Division Growing disposable income and changing lifestyles in urban India have led to greater awareness about personal grooming, health and wellness. The emerging trends augur well, for Beauty and Wellness services sector, presenting a large and exciting opportunity. We currently operate in this segment through a largely franchised network of Lakmé Beauty Salons and Ayush Therapy Centers. We have licensed ‘Lakmé’ and ‘Lever Ayush’ brands to, ‘Lakme Lever Private Limited’, a subsidiary Company. This creates the necessary focus for the services business and nurtures a dedicated customer service mindset. Lakme Lever Private Limited will evaluate options towards developing a uniquely different, new business model for this opportunity, with singularity of purpose and dedicated focus. In the meanwhile the existing network of
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Hindustan Unilever Limited
franchisees would continue to grow in the segment. 5. CUSTOMER MANAGEMENT There was a special focus on further improving customer management systems across all trade channels to drive Company’s growth agenda. This required consolidating our strong position with customers and channels in general trade. A pilot project in Mumbai Metro on customer consolidation was successfully executed. This enables an efficient back-end and a world class front-end and facilitates increased speed to deliver innovations and activation schemes to market. The concept of a ‘zero inventory model’ which reduces customers’ investment and improves logistical efficiencies was also part of the pilot project. We are investing heavily in state-of-the-art IT application systems in Sales and Distribution to substantially improve speed of information, quality of service and productivity of human resources. Distributors’ salesmen were equipped with Hand Held Terminals to simplify the processes of order taking, billing and order delivery. This gives them more time to focus on the core job of selling. Towards the end of 2008, your Company also started the process of rejuvenating its long standing and successful rural distribution system. With the significant improvements in rural economy and infrastructure, we are positioning ourselves well to serve the trade more efficiently. The process of bringing more and more outlets under direct coverage was successfully piloted. The objective is to offer the right assortment of
products to the rural consumers in line with their changing requirements and aspirations. This enables the Company to leverage its product portfolio fully by staying closer to the rural trade channels. Modern Trade has expanded rapidly across the country in the past few years, although there is some consolidation taking place recently. This retail format provides consumers with a different shopping experience. Therefore, the Company is committing resources to understand the changing shopping habits and to deliver appropriate solutions to grow the business across categories. We continued to build capabilities and improve processes in this domain. We lead many initiatives in customer service, category management and merchandising to deliver best in class practices. As Modern Trade in India is evolving rapidly, we need to win at the point-of-purchase with shoppers and deliver highest quality service to Modern Trade customers. The joint venture with Smollans Holdings of South Africa is helping us develop and increase the capabilities required to meet the overall merchandising demands in Modern Trade. They bring world class execution excellence and build the right capabilities to win in Modern Trade. The emerging hybrid customer structure (comprising General Trade, Modern Trade and Specialised Stores) requires new ‘route to market’ approaches to service customers and distributors. Your Company is equipping itself with capabilities and revitalised distribution and customer service network to face the challenges of the evolving new market dynamics.
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5.1
Project Shakti
Project Shakti is a rural initiative of your Company that targets small villages typically with a population of less than 5000. It empowers women in rural markets, while contributing well as a sales channel and is a great example of ‘Doing Well by Doing Good’. The specific objectives of Shakti are: Reach new consumers in small rural villages Develop/grow markets through consumer education programs Empower women through creation of employment opportunities for them Build a sustainable business model Project Shakti benefits the business by significantly enhancing its direct rural reach, and by helping the Company’s brands to touch the lives of people hitherto untouched. Shakti is built on Shakti Entrepreneurship program and Shakti Vani program. Shakti Entrepreneur program creates a win-win model by enhancing the efficacy of the micro-credit as an institution to alleviate poverty; this is done by providing appropriate investment opportunities and sustainable income for the recipients. Micro-credit enables rural women to become direct-to-home distributors in rural markets with significant retained earnings. This benefits rural consumers also by giving them access to some of India’s most trusted brands at affordable prices. Significant investment is made in building the capability of Shakti entrepreneurs through classroom and
rural communication vehicle using the principle of one-to-one contact which is successful in driving important messages on sanitation, good hygiene practices and women empowerment. Brand messages are a part of these which create a potential platform for brands to communicate with rural consumers.
on-the-job training programmes. This helps build confidence and develop the business acumen necessary to run a micro-enterprise. In addition, your Company invests significantly in creating rural activation models which expose rural consumers to Company’s brands. Your Company is working on bringing efficiencies in this model by creating ‘communities’ within the Shakti family. Groups of Shakti Entrepreneurs are organised into ‘Kuls’ (communities). These communities are provided monthly forums for interaction where the concept of ‘each one help one’ is practised. The idea is to build on collective synergies of Shakti Entrepreneurs and to help them manage their business independently. This is in line with the long term goal of developing entrepreneurs out of women in rural areas. This is currently being piloted in Karnataka.
By the end of the year 2008, Shakti network had grown to more than 45,000 Shakti Ammas covering 100,000 plus villages across 15 states in the country and reaching over 3 million homes. 6. SUPPLY CHAIN
Pureit has been launched on a pilot basis in the Shakti channel. This pilot has started in Andhra Pradesh where Shakti was born nine years ago. Shakti Ammas would offer Pureit water purifiers to households in their villages. By doing so, rural consumers will now have access to a high quality water purification system at affordable price. Shakti entrepreneurs will get yet another sustainable source of income. Shakti Vani program focuses on building awareness about health and hygiene in the rural community. Vanis are trained communicators who target congregations like village schools and ‘mohallas’ and engage with key opinion leaders of villages like the sarpanch, the school teacher etc. ‘Vani’ has emerged as a unique
Directors’ Report and Management Discussion & Analysis
We continued our journey towards delivering the vision of world class service at the lowest imaginable cost. Winning with Customers through outstanding customer service is a key thrust towards realisation of this vision. Deployment of advanced IT solutions on the back of a strong suite of SAP application systems led to significant improvements in planning and logistics. The manufacturing teams focussed on increasing operational flexibility and improving reliability to deliver better service with lesser assets. These initiatives resulted in improved customer service levels measured as ‘Customer Case Filled On Time’ (CCFOT) through the year. Several organised retailers have acknowledged our excellent customer service performance. A relentless focus on eliminating waste and hidden costs from all operations led to significant supply chain savings which helped the business in dealing with severe cost and inflationary pressures. Multifunctional teams worked together to drive cost reduction programmes
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spanning across all facets of the business. Empowered teams led initiatives to reduce specific energy consumption and also piloted the use of sustainable alternative biofuels at several sites, resulting in appreciable savings in energy costs. Buying function delivered outstanding efficiencies and reduction in procurement costs, fully leveraging the benefits of scale and synergy through Unilever’s global buying network. We also executed appropriate capital expenditure investments in creating capacity to enable future growth, and to de-bottleneck existing assets to run them efficiently; principles of Total Productive Maintenance were applied. This resulted in increase in asset productivity levels. 7. RESEARCH & DEVELOPMENT Your Company continues to benefit from the strong foundation and long tradition of Research & Development (R & D) which differentiates us from many others. These benefits flow not only from work done in Research Centres in India, but also from the centres of Unilever’s global research work. With the world class facilities and a superior science and technology culture, we are able to attract the best of talent to provide significant technology differentiation to our products and processes. The R & D labs in Mumbai and Bangalore are aligned significantly to Unilever’s global R & D. Many of the projects which are run out of these centers are of global relevance and with a strong focus on needs of this region and the overall D & E World. There are several exciting innovations that are in the pipeline now in Water, Laundry, Skin, Oral Care, Beverages,
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Hindustan Unilever Limited
Savoury, Ice Cream etc. These technological innovations cover the whole spectrum of consumer income segments. A series of new and superior products were launched helped by the formidable global research and development activities. A range of Pond’s top end products with anti-ageing and skin lightening benefits was introduced using technology developed at the global R & D centre. The R & D team also developed products to address specific requirements of Indian consumers like Lifebuoy range with improved hygiene benefits and Wheel detergents requiring less effort for cleaning. The R & D team responded very quickly to the increase in cost of various inputs during the year and your Company realised significant benefits. Ice Cream team helped to launch a slew of new variants. Based on unique consumer insight, Foods R & D came up with an innovative design for packaging of Kissan Jam in Squeeze Tubes. Development of Knorr Indian Mealmakers and Indian Style Soups launched in several variants also demonstrates the interconnected nature of R & D and business. India now occupies a premier position in the global R & D domain for Unilever, performing leading research and development work to advance its brands and categories. A testimony of the high quality research done by Indian labs is the recent selection of Bangalore lab as one of the six major Discover Research Centers for Unilever globally. In addition to the professional growth of people and creation of new products, their global role also facilitates further advances, through synergistic links to the other major Unilever laboratories.
8. ENVIRONMENT, SAFETY AND HEALTH /ENERGY CONSERVATION Your Company continues to focus on the vision of an ‘injury free’ organisation. In 2008, the safety agenda consisted of three key thrusts: an ongoing behavioural safety initiative, a renewed focus on systems and processes, and a road safety programme covering all employees. The behavioural safety programme has now been in place for more than three years and continues to deliver strong results. Several measures have been implemented to revitalise safety systems and processes especially across the extended supply chain operations – in copacking locations and in distribution centres. Road safety was also a key thrust during the year. Employees across the Company were trained and educated about road safety. In several locations, your Company has actively engaged with local administration authorities to mitigate hazards. These efforts have led to a substantial improvement in safety performance across the Company. The environmental agenda was marked by a shift towards reducing environmental impact of Company’s operations. During the year, four sites recorded water positive status. This was achieved through a combination of water conservation, rain water harvesting and water recycling. Four sites modified their boilers to use bio-fuels, resulting in significant environmental benefits. The information required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies
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(Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is appended hereto and forms part of this report. 9. HUMAN RESOURCES The Human Resources (HR) agenda for the year 2008 was focused on strengthening three key areas – completing the second phase of the HR Transformation (HRT) programme that had been initiated in 2007, building organisational and individual capabilities and significantly enhancing people productivity to drive sustainable business growth. HRT is a business change programme and impacts ways of working. At the core of this programme are world class IT enabled processes to efficiently manage Human Resources transactions. The programme also aligns HR systems and processes in a similar way across Unilever. In 2008, the HRT journey moved to the next phase of implementation; line organisation is taking over management of transactions for their teams themselves which was previously done by HR Manager. The technology applications are available on a ‘self-service’ portal which increase the productivity of every line manager and HR Manager by freeing up their time from managing routine and transactional workload. HRT has been a big journey of change and your Company is on course to go live with this change in 2009. The belief that ‘great people create great organisations’ has been at the core of the Company’s approach to its people. Your Company made significant investments for training in the areas of marketing excellence, customer service and building capabilities for organised retail
Your Company was conferred HR Excellence Award by the CII Western Region for the year, wherein we have set some new benchmarks in CII’s assessment for the award. During the year, HUL was ranked as the ‘Dream Employer’ across top management and technical schools in India, a testimony to your Company’s strong leadership development practices.
trade. Large number of training programmes were delivered through classrooms, new capability building courses and external learning sessions. Our e-learning platform introduced in 2007 offers a bouquet of 3000+ courses via internet. This continues to provide employees access to learning anywhere, anytime. In its second year itself, with over 25000 course registrations by our employees, we have set a benchmark. During 2008, TPM gained further momentum through TPMedge initiative. This is aimed at distilling TPM best practices and Unilever business processes into an effective blend for Every Day Great Execution (EDGE). The focus is equally on enlisting more and more shopfloor ownership for sustaining TPM processes across all our operations. The TPMedge process is designed around a system of monthly self-assessments and quarterly central assessments of the health of on-ground TPM systems. These assessments now form the centre piece of continuous improvement efforts. There was practically no loss of mandays due to industrial relations issues. Seventeen productivity linked long term settlements were signed through the process of collective bargaining involving over 5000 employees. All these settlements were signed with zero disruption to business activity reflecting the maturity of workmen collectively. In 2008, four manufacturing units were restructured and another two went through a consolidation. The process of redeployment/rehabilitation was undertaken with utmost concern for our people.
Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, forms part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent excluding the statement containing the particulars to be provided under Section 217(2A) of the Act. Any member interested in obtaining such particulars may inspect the same at the Registered Office of the Company or write to the Company Secretary for a copy thereof. 10. INFORMATION TECHNOLOGY Your Company believes that Information Technology is a source of competitive advantage and has therefore continued to invest in the same.
Directors’ Report and Management Discussion & Analysis
Information technology in the area of sales and customer development has been one of the key thrusts. All Redistribution Stockists operate on a common transaction system fully integrated with Company’s systems. This capability enables to collaborate with customers on a near on-line basis and significantly improves field execution and customer service. In 2008, the Company implemented a handheld based selling system across nearly 10000 distributors’ salesmen. In Modern Trade, the IT
Annual Report 2008-09
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platforms were leveraged to closely engage with this emerging Channel to increase efficiencies and service levels. We have also completed the implementation of an enterprisewide SAP capability. This was accompanied by significant reengineering and simplification of the underlying business processes. All Company customers can now place replenishment orders on SAP. It also provides capability for supply chain optimisation across a large and complex manufacturing and distribution network. Additionally, it supports a comprehensive data warehouse with real-time information across all our operations. The endto-end SAP capability will be the platform for further business process innovation and increased speed of response. Towards realising the ambition of a chequeless organisation, we have implemented both e-collection (from sales) and e-payments (for purchases) with steadily increasing coverage. These have increased speed and service substantially while simplifying processes. We continue to invest in IT infrastructure to support all business applications. A robust virtual private network using MPLS technology, is supplemented by VSATs for the remote locations. We have leveraged the expanded telecom footprint in the country to provide high bandwidth terrestrial links to all operating units. Video conferencing is extensively used to collaborate across locations while reducing travel costs. Information Security and reliable disaster recovery management
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Hindustan Unilever Limited
continue to be a critical focus area – especially as most business processes become fully IT-enabled. We carry out regular exercises to reassure ourselves on the same. 11. FINANCE AND ACCOUNTS Focus on cash generation continued and we delivered a strong operating cash flow during the period. This was driven by good business performance, underlying efficiencies and cost savings across the supply chain and a continued efficient collection system. The Company managed the investments prudently by deployment of cash surplus in a balanced portfolio of safe and liquid debt market instruments; returns earned were higher than market benchmarks. In a volatile financial environment, towards the December quarter of 2008, surplus funds were invested in bank fixed deposits. Capital Expenditure during the fifteen month period was at Rs. 609 crores (2007, Rs. 372 crores) and was in the areas of capacity expansion, information technology, energy and other cost savings. The total amount of fixed deposits taken by the Company as of 31st March, 2009 was Nil. There was no outstanding towards unclaimed deposits payable to depositors as on 31st March, 2009. In terms of the provisions of Investor Education and Protection Fund (Awareness and Protection of Investor) Rules, 2001, Rs. 285 lakhs of unpaid/unclaimed dividends, interest on debentures and deposits were transferred during the year to the Investor Education and Protection Fund. Return on Net Worth, Return on Capital Employed and Earnings Per Share (EPS) for the last four years and for the fifteen month period ended 31st March, 2009 are given below: For the year
2004
2005
2006
2007
Period ended 31st March, 2009
Return on Net Worth (%)
57.2
61.1
68.1
80.1
103.6*
Return on Capital Employed (%)
45.9
68.7
67.0
78.0
107.5*
Basic EPS of Re.1 (after exceptional items)
5.44
6.40
8.41
8.73
11.46**
* Annualised numbers for proportionate period ** for fifteen month period
Key figures for 12 months ended April – March As indicated earlier, the full year audited results for 15 month period ended 31st March, 2009 are not comparable with those for year ended 31st December, 2007. However, on a memorandum basis, for comparative purposes, unaudited results for 12 months ended 31st March, 2009 are given below: Net sales at Rs. 16476.75 crores (2007–08: 14266.94 crores) grew by 15.5% Profit from Operations before Interest and Exceptional items at Rs 2396.06 crores (2007–08: 2017 crores) grew by 18.8% Profit After Tax from ordinary activities before exceptional items at Rs 2065.20 crores (2007–08: 1795.5 crores) grew by 15% Net profit at Rs 2115.50 crores (2007–08: 1913.53 crores) grew by 10.6%
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Segment-wise results Your Company has identified seven business segments in line with the Accounting Standard on Segment Reporting (AS-17). These are: (i) Soaps and Detergents, (ii) Personal Products, (iii) Beverages, (iv) Foods, including culinary and branded staples, (v) Ice Creams, (vi) Exports, and (vii) Others, including Water. The audited financial results of these segments are given as part of financial statements. 12. MERGERS, ACQUISITIONS, JOINT VENTURES AND DISPOSALS 12.1 Demerger of immovable properties at Brookefields, Bangalore We had taken shareholders’ approval to the scheme of demerger covering transfer of certain immovable properties of the Company located at Brookefields, Bangalore to Brooke Bond Real Estates Private Limited, a subsidiary of the Company. The objective of the said demerger was to develop an IT and IT enabled Special Economic Zone at the Demerged Unit. The Company has received in-principle approval from the State Government of Karnataka for such a project. Further approvals are being sought, including that of Government of India. This project will be executed after all statutory approvals are obtained. 12.2 Amendment of the Shareholders’ Agreement with CapGemini SA In line with its strategy to focus on core areas, during October 2006, your Company divested its 51% controlling stake in the business (Capgemini Business Services (India) Limited) to CapGemini SA for a consideration of Rs 52 crores.
Scheme has been registered with the Income Tax authorities in compliance with the relevant provisions of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. As per the terms of the Performance Share Scheme, employees are eligible for the award of conditional rights to receive equity shares of the Company at the face value of Re. 1/- per share. These awards will vest only on the achievement of certain performance criteria measured over a 3 year period. 148 employees including Wholetime Directors were awarded conditional rights to receive a total of 2,06,250 equity shares at the face value of Re. 1/-.
Both parties have a put/call option for the balance 49% stake. In December, 2008 the parties agreed to extend the period of the options by one year from 31st March, 2009 to 31st March, 2010, being in the business and strategic interests of both parties. 12.3 Lakme Limited
Lever
Private
Lakme Lever Private Limited (LLPL), a 100% subsidiary of your Company has been formed to implement the potential beauty services opportunity for providing the necessary focus and developing a service culture. Transfer of a few own outlets from HUL to LLPL will be done during this year. Please refer to 4.7 above. 13. EMPLOYEE STOCK OPTION PLAN (ESOP)
14. CORPORATE GOVERNANCE
Details of the shares issued under ESOP, as also the disclosures in compliance with Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in the Annexure to this Report. None of the management employees or Wholetime Directors has received options exceeding 5% of the value of the options issued for the year ending March 2009. Likewise, no employee has been issued share options, during the period year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant. Pursuant to the approval of the members at the Annual General Meeting held on 29th May, 2006, the Company adopted the ‘2006 HLL Performance Share Scheme’. The
Directors’ Report and Management Discussion & Analysis
Your Company has been practising the principles of good corporate governance over the years and lays strong emphasis on transparency, accountability and integrity. A separate section on Corporate Governance is given on page no. 46 of the Annual Report and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement(s) with the Stock Exchange(s) and a certificate of the CEO & CFO in terms of sub-clause (v) of Clause 49 of Listing Agreement, inter alia, confirming the correctness of the financial statements, adequacy of the internal control measures and reporting of matters to the Audit Committee is annexed to the Corporate Governance Report. 14.1 Risk and Internal Adequacy Your Company manages cash and cash flow processes assiduously involving all parts of the business.
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There was net cash surplus of Rs. 1355 crores (net of short term export and other debts of Rs. 422 crores) as on 31 March, 2009. The Company’s debt equity ratio is very low which provides ample scope to gear up the Balance Sheet should that need arise. Foreign exchange transactions are always fully covered with strict limits placed on the amount of exposure, if any at any point in time. There are no materially significant uncovered exchange rate risks in the context of Company’s imports and exports. Company provides for ‘mark to market’ gains or losses at every quarter end in line with the requirements of AS-11. These are being highlighted separately every quarter. Company’s internal control systems are well commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal auditors and cover all the offices, factories and key areas of business. Significant audit observations and follow up actions thereon are reported to the Audit Committee. Audit Committee reviews the adequacy and effectiveness of the Company’s internal control environment and monitors the implementation of audit recommendations including those relating to strengthening of the Company’s risk management policies and systems. Your Company has an elaborate process for Risk Management. This rests on the three pillars of Business Risk Assessment, Operational Controls Assessment and Policy Compliance at all levels through a ‘positive assurance process’. Major risks identified are systematically
40
Hindustan Unilever Limited
addressed through mitigating actions on a continuing basis. These are discussed with both Management Committee (doubling up as Risk Committee) and Audit Committee. Some of the risks relate to economic volatility, competitive intensity, slower market growth and/ or downtrading and pressures on margins. 14.2
Outlook
It is believed that India’s GDP will continue to grow robustly in the future, not withstanding the current and short term blips. FMCG categories have very good potential to grow, as the current per capita consumption levels are still low, compared even to some other Developing and Emerging economies like China, Indonesia, Thailand, etc. Participation by more players through competitive activities will only help expand the market for HUL’s categories. Increased per capita income will also provide opportunities to consumers for brand experiences and up trading. While commodity costs are subdued at present, significant upward trends due to global triggers, could cause unit prices of products to rise and consequently slow down market growth. Your Company will continue to focus on both development and expansion of markets and share gains as appropriate to secure competitive growth. Underlying volume growth is a key requirement to deliver this. Managing margins through judicious pricing and sustained efficiencies and cost saving will receive constant attention. 14.3
Cautionary Statement
Statements in this Report, particularly those which relate to Management Discussion and
Analysis, describing the Company’s objectives, projections, estimates and expectations may constitute ‘forward looking statements’ within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied. 14.4
Subsidiary Companies
Lakme Lever Private Limited became the wholly owned subsidiary of the Company to operate in Beauty & Wellness segment through ‘Lakmé Beauty Salons’ and ‘Ayush Therapy Centers’, Brands ‘Lakmé’ and ‘Lever Ayush’ will be licensed to Lakme Lever Private Limited by HUL. A statement pursuant to Section 212 of the Companies Act, 1956 relating to Subsidiary Companies is attached to the accounts. In terms of approval granted by the Central Government under Section 212(8) of the Companies Act, 1956, the Audited Statements of Accounts and the Auditors’ Reports thereon for the fifteen month period ended 31st March, 2009 along with the Reports of the Board of Directors of the Company’s subsidiaries have not been annexed. The Company will make available these documents upon request by any member of the Company interested in obtaining the same. However, as directed by the Central Government, the financial data of the subsidiaries have been furnished under ‘Subsidiary Companies’ Particulars’ forming part of the Annual Report (Refer Page 150). Further, pursuant to Accounting Standard 21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company in this Annual Report include the financial information of its subsidiaries.
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15. CORPORATE SOCIAL RESPONSIBILITY Your Company strongly believes that growth has not only to be profitable and competitive, but also sustainable in a socially relevant way. Our sustainability agenda therefore seeks to address issues of Hygiene, Nutrition, Enhancement of livelihoods, Reduction of greenhouse gases and water footprint. These social, environment and economic agenda are integrated and well woven into the brands, people and the business of the Company. The strategy is to grow markets in a responsible manner and to create a wider positive impact through brands. We believe that ‘doing well’ and ‘doing good’ are two sides of the same coin and it would work towards realising the vision of making a real difference to every Indian. We have made significant progress on the environment front over the past few years. Your Company has reduced water usage per tonne by more than 26% in its manufacturing operations since 2004. The Company aims to become water positive across all its operations by 2015. The energy consumption per unit of production since 2004 has also come down by 34%. We have exceeded the target of 25% reduction in CO2 (Green House gases) in manufacturing operations per tonne of production against a baseline of 2004. We have taken a lead in sustainable agricultural sourcing; 10 Indian tea estates have been provided with the Rainforest Alliance certification. Handwash programme driven by Lifebuoy and safe drinking water through the innovation of Pureit have made significant impact in the area of health and hygiene.
To commemorate your Company’s 75th year, employees of the Company had committed to volunteer one hour for everyday that Hindustan Unilever has been in the country, which amounted to 27,375 hours of voluntary work. During the year, with an overwhelming response, the employees undertook volunteering and community service totaling more than 48,000 hours and addressed some of the issues facing our country. In partnership with DHAN foundation, your Company has also enhanced the livelihoods of 75,000 women in southern India.
our small way some of India’s major challenges like poverty, health, climate change and demographic shifts. 16. BOARD OF DIRECTORS
Your Company has contributed 10,000 kits worth Rs. 60 lakhs as the first instalment of relief material for the immediate relief of the flood affected families of Araria District in Bihar. The kit contained essential items such as utensils, clothes, blankets and other useful material. A sum of Rs.84 lakhs was contributed jointly by HUL and its employees to rehabilitate the underprivileged amongst the flood-affected families in the village of Jorgawan, Madhepura District, Bihar. The Project aims at providing long-term housing and livelihood aid to the people in a phased manner, through a strategic alliance among HUL, ACC and Habitat International. Your Company believes that the long-term growth and success of the business goes hand in hand with ensuring a sustainable future for the planet and helping society to prosper. Increasingly we find that we can only achieve our goal to deliver Competitive, Profitable and Sustainable Growth of our Business by providing superior and safe products, reach new consumers and markets in ways that help address in Directors’ Report and Management Discussion & Analysis
At an Extraordinary General Meeting held on 4th April, 2008, Mr. Nitin Paranjpe was appointed as the Managing Director and CEO of the Company to succeed Mr. Douglas Baillie, who stepped down as a CEO to join the Unilever Executive, taking on the role of President, Western Europe. The Board places on record their appreciation for the distinguished services rendered by Mr. Douglas Baillie during his tenure with the Company. Consequent to his appointment as Chairman, Unilever Russia, Ukraine and Belarus (RUB), Mr. Sanjiv Kakkar stepped down as an Executive Director, Sales & Customer Development w.e.f. 1st September, 2008. The Board places on record their appreciation for the valuable contribution made by Mr. Sanjiv Kakkar while leading the Foods business and then the Customer Development function of the Company. Dr. R. A. Mashelkar was appointed as Non Executive Independent Director of the Company in the Annual General Meeting held on 4th April, 2008. Mr. Dhaval Buch, Executive Director Supply Chain, was appointed as an Additional Director on the Board with effect from 4th April, 2008 and Mr. Gopal Vittal, Executive Director Home & Personal Care, was appointed as an Additional Director on the Board with effect from 1st September, 2008 in accordance with Section 269 and Article 111 of the Articles of Association.
Annual Report 2008-09
41
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Mr. D. Sundaram, Director Finance and IT was elevated as the Vice Chairman with effect from 4th April, 2008. He will not be seeking re–appointment in the ensuing Annual General Meeting as he has decided to retire from the services of the Company at the Annual General Meeting. The Board places on record their appreciation for the valuable services rendered by Mr. D. Sundaram during his long innings with HUL, including as a member of the Board for the past ten years. To fill up the vacancy caused by the retirement of Mr. D. Sundaram, it is proposed to appoint Mr. Sridhar Ramamurthy as Executive Director Finance and IT of the Company. Notices have been received from members pursuant to Section 257 of the Companies Act, together with necessary deposits proposing the appointments of Mr. Dhaval Buch, Mr. Gopal Vittal and Mr. Sridhar Ramamurthy as Wholetime Directors on the Board. In accordance with the Articles of Association of the Company, all other Directors, except for Managing Director, will retire at the ensuing Annual General Meeting and being eligible offer themselves for re-election. 17. MANAGEMENT COMMITTEE The day-to-day management affairs of the Company are vested with the Management Committee which is subjected to the overall superintendence and control of the Board. The Management Committee is headed by Mr. Nitin Paranjpe, as the Chief Executive Officer, and has functional/business heads as its members. Mr. Gopal Vittal, Executive Director, Home & Personal Care was appointed
42
Hindustan Unilever Limited
as the member of the Management Committee with effect from 1st September, 2008. Mr. Hemant Bakshi moved from his role as Regional Category Vice President, Skin, South Asia, Unilever, to take over from Mr Sanjiv Kakkar as Executive Director, Sales & Customer Development in the Management Committee with effect from 1st September, 2008. 18. AUDITORS M/s. Lovelock & Lewes, statutory auditors of the Company retire and offer themselves for re-appointment as the statutory auditor of the Company pursuant to Section 224 of the Companies Act, 1956.
department and others associated with the Company as its trading partners. Your Company looks upon them as partners in its progress and has shared with them the rewards of growth. It will be the Company’s endeavour to build and nurture strong links with the trade based on mutuality of benefits, respect to and co-operation with each other, consistent with consumer interests. Directors also take this opportunity to thank all investors, clients, vendors, banks, regulatory and government authorities and stock exchanges, for their continued support.
On behalf of the Board
19. APPRECIATIONS AND ACKNOWLEDGEMENTS Directors wish to place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the industry. Directors also like to acknowledge the excellent contribution by Unilever to your Company in providing the latest innovations, technological improvements and marketing inputs in respect of almost all the categories in which we operate. This has enabled the Company to provide higher levels of consumer delight through continuous improvements in existing products and introduction of new products. The Board place on record their appreciation for the support and co-operation your Company has been receiving from its suppliers, redistribution stockists, retailers, business partners, canteen stores
Harish Manwani Chairman Mumbai 10th May, 2009
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"//&963& to the Directors’ Report DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY 15 Months ended 31st March, 2009
12 Months ended 31st December, 2007
Lakh KWH Rs.Lakhs Rs.
40.48 210.73 5.21
23.39 116.59 4.99
Lakh KWH KWH Rs.
1.82 2.50 15.50 Nil
– – – Nil
1,000.34 307.46 30,735.96
644.00 152.43 23,669.80
249.62 61.69
145.70 40.12
Canned and processed fruits and vegetables A 1
POWER AND FUEL CONSUMPTION Electricity (a) Purchased Unit Total Amount Rate / Unit (b)
2
B
Own Generation (i) Through own generator Unit Unit per ltr of diesel oil Cost per unit (ii) Through steam turbine / generator Furnace Oil Quantity Total Cost Average Rate CONSUMPTION PER UNIT OF PRODUCTION Electricity Furnace Oil
KL Rs.Lakhs Rs. / KL KWH/Tonne Lts/Tonne
DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION 1
3
Specific areas in which R&D carried out by the Company - New product / process development - Quality enhancement to achieve International Standards. - Technology Upgradation - Speciality ingredients from natural sources - Development and evaluation of alternative raw materials - Project of Global relevance
2
Benefits derived as a result of the above R&D and Future plans of action - The benefits and Future plan of action have been discussed in details in the Director’s report
Expenditure of R&D (a) (b) (c) (d)
Capital Recurring Total Total R & D expenditure as a percentage of total turnover
15 Months ended 31st March, 2009 14,80 74,47 89,27 0.44%
Rs. lakhs 12 Months ended 31st December, 2007 9,42 49,39 58,81 0.43%
TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION 1
3
2 Efforts, in brief, made towards technology absorption, adoption and innovation The Company maintains interaction with Unilever internationally. This is facilitated through a well co-ordinated management exchange programe. Imported Technology (a) Technology imported - Cosmetic products (b) Year of import - 2001 (c) Has technology been fully absorbed - No
Benefits derived as a result of the above efforts The benefits have been covered in the Director’s report.
Rs. lakhs FOREIGN EXCHANGE EARNINGS & OUTGO Foreign exchange earnings Foreign exchange outgo
15 Months ended 31st March, 2009 1941,89.37 2731,91.49
Directors’ Report and Management Discussion & Analysis
12 Months ended 31st December, 2007 1483,70.72 1975,94.75
Annual Report 2008-09
43
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"//&963& to the Directors’ Report DISCLOSURE PURSUANT TO THE PROVISIONS OF SECURITIES AND EXCHANGE BOARD OF INDIA (EMPLOYEE STOCK OPTION SCHEME AND EMPLOYEE STOCK PURCHASE SCHEME) GUIDELINES, 1999 Stock Option 2001
Stock Option 2002
Stock Option 2003
Stock Option 2004
Stock Option 2005
a) Options granted
24,75,100 equity shares of Re. 1/- each valued at Rs. 53.82 crores
32,33,601 equity shares of Re. 1/- each valued at Rs. 68.02 crores
42,76,090 equity shares of Re. 1/- each valued at Rs. 58.16 crores
16,30,450 equity shares of Re. 1/- each valued at Rs. 20.95 crores
15,47,700 equity shares of Re. 1/- each valued at Rs. 20.44 crores
b) The pricing formula
Closing market price as on the date of option grant - 24.7.2001
Closing market price as on the date of option grant - 23.4.2002
Closing market price as on the date of option grant - 24.4.2003
Average of highs and lows for two week period preceding the date of option grant – 30.6.2004
c) Options vested
Rs. 217.45 Options vested after three years from date of grant (24.7.2001)
Rs. 210.35 Options vested after three years from date of grant (23.4.2002)
Rs. 136.00 Options vested after three years from date of grant (24.4.2003)
Rs 128.47 Options vested after three years from date of grant (30.06.2004)
Closing market price, prior to the date of meeting of the Board of Directors in which the options were granted – 26.5.2005 Rs. 132.05 Options vested after three years from date of grant (27.05.2005)
d) Options exercised (as at March 31, 2009)
7,86,195 equity shares of Re 1/- each
11,36,548 equity shares of Re 1/- each
23,54,435 equity shares of Re 1/- each
6,69,206 equity shares of Re 1/- each
4,73,200 equity shares of Re 1/- each
e) The total number of shares arising as a result of exercise of option
7,86,195 equity shares of Re 1/- each
11,36,548 equity shares of Re 1/- each
23,54,435 equity shares of Re 1/- each
6,69,206 equity shares of Re 1/- each
4,73,200 equity shares of Re 1/- each
9,04,320 equity shares of Re 1/- each
6,18,345 equity shares of Re 1/- each
3,33,500 equity shares of Re 1/- each
2,58,500 equity shares of Re 1/- each
f) Options lapsed (as at March 31, 2009) 8,65,900 equity shares of Re 1/- each g) Variation of terms of options:
NA
NA
NA
NA
NA
h) Money realised by exercise of options
Rs 8.26 crores
Rs 10.61 crores
Rs 7.33 crores
Rs 5.66 crores
Rs 6.25 crores
i)
Total number of options in force (as at 8,23,005 equity shares March 31, 2009) of Re 1/- each
11,92,733 equity shares of Re 1/- each
13,03,310 equity shares of Re 1/- each
6,27,744 equity shares of Re 1/- each
8,16,000 equity shares of Re 1/- each
j)
Employee wise details of options granted to : i) Senior managerial personnel:
–
–
–
–
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
–
ii)
any other employee who receives NIL a grant in any one year of option amounting to 5% or more of option granted during that year;
iii)
NIL
Identified employees who were granted option during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant. k) Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20 ‘Earnings Per Share’.
44
24,12,722 equity shares of Re 1/- each were issued pursuant to the exercise of stock options by employees as per the ‘2001 HLL Stock Option Plan’ . The consequent dilution in Earnings Per Share of 2009 is less than 1 paise
Hindustan Unilever Limited
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"//&963& to the Directors’ Report DISCLOSURE PURSUANT TO THE PROVISIONS OF SECURITIES AND EXCHANGE BOARD OF INDIA (EMPLOYEE STOCK OPTION SCHEME AND EMPLOYEE STOCK PURCHASE SCHEME) GUIDELINES, 1999 Stock Option 2001 to Stock Option 2004 l)
i)
Method of calculation of employee compensation cost
ii)
Difference between the employee compensation cost so computed at (i) above and the employee compensation cost that shall have been recognised if it had used the fair value of the Options The impact of this difference on profits and on EPS of the Company
iii)
m) Weighted average exercise price and weighted average fair value
Stock Option 2001 to Stock Option 2004
Stock Option 2005 The Company has calculated the employee compensation cost using the intrinsic value method of accounting to account for Options issued under the ‘2001 HLL Stock Option Plan’. The Stock -Based as per the intrinsic value method for the year 2005 is Nil Rs.6.73 Crores
The effect of adopting the fair value method on the net income and earnings per share of 2005 is presented below: Net Income Rs.Crores As reported 14,08.11 Add: Intrinsic value Compensation Cost Nil Less: Fair Value Compensation Cost 6.73 Adjusted Net Income 14,01.38 Earnings Per Share (Rs.) (Basic and Diluted) - As reported 6.40 - As adjusted 6.37 NA
NA
n)
Fair value of Options based on Black Scholes methodology Assumptions 7.25% Risk free rate Expected life of options 7 years Expected Volatility (based on daily market 30.04% closing price from 3 years -2003 to 2005) Expected Dividends Rs 5.00 per share Closing market price of share on date of Rs 138.20 option grant Notes: (i) The ‘2001 HLL Stock Option Plan’ has been discontinued by the Company from 2006. (ii) The Pricing Formula adopted by the Company for ‘Employees Stock Option Plan’ for the years 2001 to 2005, was based on the ‘Market Price’ as defined in SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, and Maximum number of options to be issued per employee in a fiscal year did not exceed 0.01% of the outstanding issued share capital, as expressed in Clause 11 of the ‘2001 HLL Stock Option Plan’ in the line with Clause 6.2(h) of SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999. Performance Share Plan : In 2008-09 as per terms of the ‘2006 HLL Performance Share Scheme’ employees were awarded conditional right to receive 2,06,250 equity shares of the Company at face value of Re.1/- each. These awards will vest only on achievement of the performance criteria measured over a 3 year period. The list of senior management who were awarded conditional rights under the plan is given below: Name of the Manager Nitin Paranjpe D. Sundaram Dhaval Buch Shrijeet Mishra Gopal Vittal Ashok Gupta Leena Menon Hemant Bakshi Sanjiv Kakkar
Performance Shares Awarded in 2008 9,900 3,300 3,300 2,750 4,400 2,200 2,750 2,200 5,500
Directors’ Report and Management Discussion & Analysis
Annual Report 2008-09
45
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$03103"5& (07&3/"/$& I believe that nothing can be greater than a business, however small it may be, that is governed by conscience; and that nothing can be meaner or more petty than a business, however large, governed without honesty and without brotherhood -William Hesketh Lever Transparency and accountability are the two basic tenets of Corporate Governance. We, at Hindustan Unilever, feel proud to belong to a Company whose visionary founders had laid the foundation stone for good governance long back and made it an integral principle of the business, demonstrated in the words above. Responsible corporate conduct is integral to the way we do our business. Our actions are governed by our values and principles, which are reinforced at all levels within the Company. We, at Hindustan Unilever, are committed to doing things the right way which means taking business decisions and acting in a way that is ethical and is in compliance with the applicable legal requirements. Our Code of Business Principles is an extension of our values and reflects our continued commitment to ethical business practices and regulatory compliance. We acknowledge our individual and collective responsibilities to manage our business activities with integrity. To succeed, we believe, requires the highest standards of corporate behaviour towards everyone we work with, the communities we touch, and the environment on which we have an impact. This is our road to sustainable, profitable growth and creating long-term value for our shareholders, our people, and our
46
Hindustan Unilever Limited
business partners. During last 75 years of the Company’s existence, the above principles have been the guiding force for whatever we do and shall continue to be so in the coming years. The Board of Directors of your Company are responsible for and committed to sound principles of Corporate Governance in the Company. The Board plays a critical role in overseeing how the management serves the short and long term interests of shareholders and other stakeholders. This belief is reflected in our governance practices, under which we strive to maintain an active, informed, and independent Board. We keep our governance practices under continuous review and benchmark ourselves to the best governed companies across the globe. THE BOARD OF DIRECTORS The Board of Directors (the Board) is entrusted with the ultimate responsibility of the management, general affairs, direction and performance of the Company and has been vested with the requisite powers, authorities and duties. The Management Committee of the Company is headed by the Managing Director and Chief Executive Officer and has business/ functional heads as its members, which looks after management of the day-to-day affairs of the Company.
Appointment and Tenure The Directors of the Company are appointed by shareholders at General Meetings. All Directors, except for the Managing Director, step down at the Annual General Meeting each year and, if eligible, offer themselves for re-election, in accordance with the Articles of Association of the Company. The Executive Directors on the Board serve in accordance with the terms of their contracts of service with the Company. As per the Company policy, the Independent Directors do not seek re-appointment on attaining the age of 70 years. The Company also follows the policy of having a ceiling of nine years on the term of office of Independent Directors after revised Clause 49 of Listing Agreement has come into effect in October 2004. Composition The Board consists of 10 Directors comprising four Executive Directors, one Non-Executive Director and five Independent Directors. The Chairman of the Board is a Non-Executive Director. The Board represents an optimal mix of professionalism, knowledge and experience. The detailed profiles of the members of the Board of Directors are provided on page nos. 18 to 23 of the Annual Report.
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Composition and Directorships/Committee Membership as on 31st March, 2009 Date of Joining the Board
Directorships in other Companies#
Memberships of Committees of other Companies@
Chairmanship of Committees of other @ Companies
29.04.2005
-
-
-
01.06.2007
-
-
-
23.03.1999
6
2
2
Dhaval Buch
04.04.2008
1
-
-
Gopal Vittal
01.09.2008
1
-
-
D. S. Parekh
16.05.1997
12
6
4
C. K. Prahalad
01.05.2000
-
-
-
A. Narayan
29.06.2001
1
-
-
S. Ramadorai
20.05.2002
11
3
1
R. A. Mashelkar
04.04.2008
6
1
-
Name
Non-Executive Chairman Harish Manwani Managing Director & CEO Nitin Paranjpe Vice Chairman & CFO D. Sundaram Executive Directors
Independent Directors
#
@
Excluding Private Limited Companies, Foreign Companies, Section 25 Companies and Alternate Directorships. Includes only Audit Committee and Shareholders/Investors Grievance Committee.
None of the Directors is a member of the Board of more than fifteen Companies or a member of more than ten Board-level Committees or Chairman of more than five such Committees. Board Meetings The Board meets frequently to discuss and decide on Company/business policy, and strategy apart from other normal Board business. The Board/ Committee meetings held each year are pre-scheduled. A tentative annual calendar of Board and Committee meetings is circulated to facilitate the Directors to plan their schedules for ensuring their meaningful participation in the meetings, well in advance. However, in case of a
special and urgent business need, the Board’s approval is taken by circulating the resolution, which is ratified in the next Board Meeting. The agenda for the Board/Committee meetings is generally accompanied by background notes and other material information which is circulated among the Directors in advance to facilitate discussion for taking an informed decision. The Independent Directors also meet separately with the Chairman before every Board Meeting to discuss on issues and their concerns, if any.
4th April, 2008, 28th April, 2008, 25th July, 2008, 24th October, 2008, 19th December, 2008, 25th January, 2009 and 14th March, 2009. The maximum interval between any two meetings was well within the maximum allowed gap of four months.
During the fifteen month period ended on 31st March, 2009 eight Board Meetings were held on 13th February, 2008,
Corporate Governance
Annual Report 2008-09
47
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Attendance of Directors at Board Meetings Name
risk evaluation and control; quarterly details of foreign exchange exposure and the steps taken by management to limit the risks of adverse exchange rate movement; and
Attendance
Harish Manwani
8 of 8
Nitin Paranjpe
8 of 8
Douglas Baillie$
2 of 2
D. Sundaram
8 of 8
D. S. Parekh
6 of 8
C. K. Prahalad
6 of 8
A. Narayan
8 of 8
S. Ramadorai
6 of 8
R. A. Mashelkar*
5 of 6 2 of 2
V. Narayanan$ Dhaval Buch*
compliance with all relevant legislations and regulations. Board Support The Company Secretary of the Company attends all the Meetings of Board and advises/assures the Board on Compliance and Governance principles.
6 of 6
Gopal Vittal**
3 of 4
Sanjiv Kakkar$$
4 of 4
$
Ceased to be a Director w.e.f. 4th April, 2008 Ceased to be a Director w.e.f. 1st September, 2008 * Appointed as Director w.e.f. 4th April, 2008 ** Appointed as Director w.e.f 1st September, 2008 $$
Attendance is expressed as number of meetings attended out of number eligible to attend. The last Annual General Meeting of the Company held on 4th April, 2008 was attended by all the members of the Board of Directors as on that date. Board Business The normal business of the Board includes: strategies for shaping of portfolio and direction of the Company and priorities, in corporate resource allocation; corporate annual plan and operating framework; quarterly reports;
business
performance
board remuneration policy and individual remuneration packages of Directors; convening a meeting of shareholders of the Company, setting the agenda thereof, and ensuring that a satisfactory dialogue with shareholders takes place; declaration / recommendation of dividend;
48
Hindustan Unilever Limited
review of functioning of the Board and its Committees; review of functioning subsidiary companies;
of
the
annual review of accounts for adoption by shareholders; quarterly and announcements;
annual
results
merger, acquisition, joint venture or disposal, if any; recruitment and remuneration of senior management; materially important show cause, demand, prosecution and penalty notices; fatal or serious accidents dangerous occurrences;
or
any materially significant effluent or pollution problems; details of any joint venture or collaboration agreement; significant labour problems and their proposed solutions; significant development in the human resources and industrial relations fronts;
Board Induction and Training Upon appointment, Directors receive a comprehensive Directors’ Manual which includes the Company’s historical background, business profiles, organisation structure, codes and policies of the Company, internal controls and risk management systems, and their roles and responsibilities as Directors of the Company. Strategy meetings are held, where business and functional heads share with the Board their short term and long term plans, major activities, likely risks and challenges with actions to mitigate them in their respective areas. The Board’s suggestions and the comments are incorporated in the business plans. Board Independence Our definition of independence of directors is derived from Clause 49 of the Listing Agreement with Stock Exchanges. Based on the confirmation/ disclosures from the directors and on evaluation of relationships disclosed, all Non-Executive Directors other than the Chairman are independent in terms of Clause 49 of the Listing Agreement. Mr. Harish Manwani, who is a member of the Executive Committee of Unilever, the Parent Company, is not counted as an Independent Director.
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COMMITTEES OF THE BOARD The Board committees play a crucial role in the governance structure of the Company and are being set out to deal with specific areas/activities which concern the Company and need a closer review. The Board committees are set up under the formal approval of the Board, to carry out the clearly defined role which is considered to be performed by members of the Board as a part of good governance practice. The Board supervises the execution of its responsibilities by the Committees and is responsible for their action. The minutes of the meetings of all the Committees are placed before the Board for review. The Board has currently established the following statutory and non statutory committees. Audit Committee The Audit Committee of the Company comprises of Non-Executive Independent Directors only. The Committee is headed by Mr. D. S. Parekh, and comprises of Mr. S. Ramadorai, Mr. Aditya Narayan, Prof. C. K. Prahalad, and Dr. R. A. Mashelkar as its Members. Dr. R. A. Mashelkar joined the Committee w.e.f. 1st September, 2008. All the current members of the Committee have the relevant experience in financial matters and the Chairman, Mr. D. S. Parekh is the financial expert for the Committee. The Audit Committee of the Company is entrusted with the responsibility to supervise the Company’s internal control and financial reporting process and inter alia performs the following functions: overseeing the Company’s financial reporting process and disclosure of financial information to ensure that the financial statements are correct, sufficient and credible; recommending
the
appointment
and removal of external auditors, fixation of audit fee and approval for payment of any other services; reviewing with management the annual financial statements before submission to the Board; reviewing with management the annual financial statements of the subsidiary companies; reviewing with the management and external and internal auditors, the adequacy of internal control systems; reviewing the adequacy of internal audit function; discussing with internal auditors any significant findings and follow up on such issues; reviewing the findings of any internal investigation by the internal auditors in matters where there is suspected fraud or irregularity, or a failure of internal control systems of a material nature, and then reporting such matters to the Board; discussing with external auditors before the audit commences on the nature and scope of audit, as well as having post-audit discussion to ascertain area of concern, if any; reviewing the Company’s financial and risk management policies; and examining reasons for substantial default in the payment to shareholders (in case of nonpayment of declared dividends) and creditors, if any. In addition to the quarterly meeting for consideration of financial results, the Special Meetings of the Audit Committee are convened for review of various business/functions of the Company, business risk assessment, review of internal audit and control assurance reports of all the major divisions, controls
and security of Company’s critical IT applications, and review of functioning and cases reported under the Code of Business Principles and Whistle Blower Policy of the Company. Internal Controls and Risk Management The Company has robust systems for internal audit and corporate risk assessment and mitigation. The Company has independent Control Assurance Department (CAD) assisted by dedicated audit teams. The internal audit covers all the factories, sales offices, warehouses, and businesses and functions controlled centrally. The audit cover plan of CAD is approved by the Audit Committee at the beginning of every year. Every quarter, the Audit Committee of the Board is presented with key control issues and actions taken on the past issues. Business Risk Assessment procedures have been set in place for self-assessment of business risks, operating controls and compliance with Corporate Policies. The objective of risk assessment is to provide to the operating management, a proactive and value adding review process, which enables them to maintain a risk profile associated with transactional controls at an acceptable level. There is an ongoing process to track the evolution of the risks and delivery of mitigating action plans. Financial and non-financial controls review procedures and guidelines are issued annually by the Corporate Risk Management department in line with Sarbanes-Oxley (s. 404) requirements. Unit heads are responsible for implementing these Operational Control Assurance procedures to confirm the effectiveness of the financial and nonfinancial controls in that unit, and to correct any instances of weaknesses identified. These procedures provide the
Corporate Governance
Annual Report 2008-09
49
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Management an assurance on the internal processes and systems. The meetings of Audit Committee are also attended by Chief Financial Officer, Statutory Auditors and Internal Auditors as special invitees. The Company Secretary acts as the secretary to the Committee. Minutes of each Audit Committee meeting are placed before, and when considered appropriate, are discussed in the meeting of the Board. The Audit Committee also
meets the Internal and External Auditors separately in absence of any management employee. The Audit Committee met seven times during the fifteen month period ended 31st March, 2009 on 13th February, 2008, 28th April, 2008, 5th July, 2008, 25th July, 2008, 24th October, 2008 19th December, 2008 and 25th January, 2009.
Attendance of Members at Audit Committee Meetings Name D.S. Parekh ( Chairman)
Attendance 5 of 7
C.K. Prahalad
4 of 7
A. Narayan
7 of 7
S. Ramadorai
5 of 7
R. A. Mashelkar
3 of 3
Attendance is expressed as number of meetings attended out of number eligible to attend. Remuneration and Compensation Committee The Remuneration Committee comprises of four Independent Directors; Mr. A. Narayan, Prof. C.K. Prahalad, Mr. S. Ramadorai and Dr. R. A. Mashelkar. Mr. A. Narayan took over from Mr. V. Narayanan as a Chairman of the Committee w.e.f. 28th April, 2008 and Dr. R. A. Mashelkar also joined the Committee as a member effective that date. Mr. Harish Manwani and Mr. Nitin Paranjpe are members of the Compensation Committee. The Compensation Committee administers Stock Option Plan of the Company and determines eligibility of employees for Stock Options. The Remuneration Committee deals with all elements of the remuneration package of all Executive Directors, i.e. salary, benefits, bonuses, stock options, pension etc. including details of fixed component and performance linked incentives, along with the performance criteria.
50
Hindustan Unilever Limited
Reward Policy The reward philosophy of the Company is to pay a market competitive reward with a strong linkage to performance. The reward philosophy is set forth into practice by various policies governing different elements of reward. The intent of all these policies is to ensure that the principles of reward philosophy are followed in entirety, thereby facilitating the Company to recruit and retain the best talent. It also ensures the effective recognition of performance and encourages a focus on achieving superior operational results. The appointment of the Executive Directors is by virtue of their employment with the Company as management employees and therefore their terms of employment viz. salary, variable pay, service contract, notice period and severance fee, if any, is governed by the policies applicable at the relevant time. The reward of the Executive Directors is determined by the Remuneration and Compensation Committee. A fair portion
of the Executive Directors’ total reward is linked to Company’s performance. This creates alignment with the strategy and business priorities to enhance shareholder value. The total reward package for Executive Directors is intended to be market competitive with a strong linkage to performance in line with the Company’s reward philosophy. The Remuneration Committee reviews the total reward annually, taking into account external benchmarks within the context of group and individual performance. In addition, the Company’s Share Plans seeks to reward Executive Directors by aligning their deliverables with shareholders’ interests. Independent Directors are eligible for sitting fees and commission not exceeding limits prescribed under the Companies Act, 1956. The remuneration payable to Non-Executive Directors is decided by the Board of Directors subject to the overall approval of shareholders of the Company. The Independent Directors are paid sitting fees of Rs. 20,000/- for attending every meeting of the Board or Committee thereof and commission on profits calculated on the basis of 1% of the net profits or Rs. 5 lakhs for each year, whichever is lower, in terms of the approval of the shareholders sought at the Annual General Meeting of the Company held on 24th June, 2005, which is valid for a period of five years i.e. upto 31st December, 2010. The Non-Executive Directors, who continuously serve minimum three terms of three years each, are also entitled for a cash retirement commission of Rs.10 lakhs at the time of retirement. Your Company benefits from the professional expertise of the Independent Directors in their individual capacity as competent professionals/business executives and through their invaluable
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experience in achieving corporate excellence. During the period, there were no pecuniary relationships or transactions between the Company and any of its
The Non-Executive Chairman of the Company does not receive any sitting fees or other reward from the Company.
Non-Executive Directors. The Company has not granted any stock options to any of its Non-Executive Directors.
Details of remuneration of Executive Directors for the 15 month period ended 31st March, 2009 Name
Bonus/ Commission@
Salary
Nitin Paranjpe
Contribution to PF
Rs. lakhs
Perquisites
Total
1,81.12
1,25.26
16.26
4.05
63.92
88.92
-
1.33
1,54.17
D. Sundaram
1,49.69
1,82.25
14.03
1.30
3,47.27
Dhaval Buch**
1,07.98 60.52
64.88 79.88
7.09 4.97
0.78 4.26
1,80.73 1,49.63
64.15
66.24
5.37
12.03
1,47.79
Douglas Baillie*
Gopal Vittal# Sanjiv Kakkar##
3,26.69
@ Includes shares vested under Global Performance Share Plan (GPSP) * Upto 4th April, 2008 ** From 4th April, 2008 # From 1st September, 2008 ## Upto 1st September, 2008
Pursuant to approval of the Members at the Annual General Meeting of the Company held on 29th May, 2006, the Company had adopted a revised Scheme ‘2006 HLL Performance Share Scheme’ in place of the existing ‘2001 HLL Stock Option Plan’. The revised scheme provided for conditional grant of Performance Shares without charging premium to eligible management employees. Details of the stock options and conditional grants made to Executive Directors Outstanding as at 31st December, 2007 Name Stock Options Nitin Paranjpe
Performance Shares
Grant under Performance Share Scheme during the period
Options exercised during the period
Balance as at 31st March, 2009 Stock Options
Performance Shares
57,348
11,000
-
9,900
57,348
D. Sundaram
1,55,550
6,600
-
3,300
1,55,550
20,900 9,900
Dhaval Buch* Gopal Vittal#
40,808 -
6,050 -
-
3,300 4,400
40,808 -
9,350 4,400
Sanjiv Kakkar@
93,415
6,050
-
5,500
93,415
11,550
Details of remuneration of Non-Executive Directors for the 15 month period ended 31st March, 2009
Rs. lakhs
* From 4th April, 2008 # From 1st September, 2008 @ Upto 1st September, 2008
Name Harish Manwani
Commission#
Sitting Fee
Perquisites
Total
-
-
0.92
0.92
D. S. Parekh
2.20
5.00
-
7.20
C. K. Prahalad
2.60
5.00
-
7.60
A. Narayan
4.00
5.00
-
9.00
S. Ramadorai
2.60
5.00
-
7.60
R. A. Mashelkar
1.80
5.00
-
6.80
V. Narayanan*
0.80
10.00
-
10.80
#
The Commission for the fifteen month period ended 31st March, 2009 will be paid to Independent Directors, subject to deduction of tax after adoption of accounts by shareholders at the Annual General Meeting to be held on 3rd July, 2009. * Mr. V.Narayanan was paid one time cash retirement commission of Rs.10 lakhs during the period.
Corporate Governance
Annual Report 2008-09
51
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The Remuneration Committee met three times during the period on 13th February, 2008, 4th April, 2008 and 24th October, 2008. Attendance of Members at Remuneration Committee Meetings Name
Attendance
A. Narayan (Chairman)
3 of 3
V. Narayanan
2 of 2
C. K. Prahalad
3 of 3
S. Ramadorai
2 of 3
R. A. Mashelkar
1 of 1
Attendance is expressed as number of meetings attended out of number eligible to attend. Shareholders/Investors Committee
Grievance
The Shareholders/Investors Grievance Committee comprises of Mr. A. Narayan as Chaiman with Mr. Nitin Paranjpe and Mr. D. Sundaram as Members of the Committee. The Committee is entrusted with the responsibility to address the shareholders’ and investors’ complaints with respect to transfer of shares, nonreceipt of annual report, non-receipt of declared dividends, etc., and ensures an expeditious share transfer process in line with the proceedings of the Share Transfer Committee. The Committee also evaluates performance and service
standards of the Registrar and Share Transfer Agents of the Company and also provides continuous guidance to improve the service levels for investors. During the fifteen month period, 179 complaints were received from the shareholders, which includes 166
complaints received for the twelve month period ended 31st December, 2008. All the complaints have been redressed to the satisfaction of shareholders/investors and none of them were pending as on 31st March, 2009.
Details of Shareholders/Investors Complaints received and redressed Complaints
Complaints
Received
Redressed
Non-Receipt of Dividend
65
65
Non-Receipt of Shares lodged for Transfer
92
92
Nature of Complaint
Other
22
22
Total
179
179
Trend of Complaints Received During Last Six Years 800
749
700 600 500 Non-receipt
400
350 279
300
247 190
200
179
100
Others
0 2003
52
Non-receipt of shares lodged for transfer
2004
Hindustan Unilever Limited
2005
2006
2007
2008-09 (15 Months)
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During the period, the Committee met two times on 25th July, 2008 and 25th January, 2009 Attendance of Members at Shareholders/Investors Grievance Committee Meetings Name
Attendance
A. Narayan (Chairman)
2 of 2
D. Sundaram
2 of 2
Nitin Paranjpe
2 of 2
Attendance is expressed as number of meetings attended out of number eligible to attend. Share Transfer/Transmission Committee The Share Transfer/Transmission Committee is formed exclusively to look into share transfer and related applications received from shareholders, with a view to accelerate the transfer procedures. The Committee comprises of three Directors of the Board and it considers applications for transfer of the Company’s shares, for splitting up, consolidating share certificates and to comply with provisions in this regard. The Committee is authorised to order cancellation of any share certificate and to sign, seal or issue new share certificate either as a result of transfer, consolidation, splitting or in lieu of share certificates lost, defaced or destroyed. The Committee meets atleast once a week to approve the share transfer and other related matters. Committee for Allotment of Shares under ESOPs The Committee for Allotment of Shares under ESOPs has been constituted to expedite the process of allotment and issue of eligible shares to the employees of the Company under the Stock Option Plan of the Company. The ESOP Committee comprises of three Directors the Board. The Committee is specially constituted for approval, issue and allotment of shares under ESOPs, pursuant to and in terms of ‘2001 HLL Stock Option Plan’.
Committee for Approving Disposal of Surplus Residential Assets The Committee for approving disposal of surplus residential assets comprises of three Directors of the Board. The Committee is entrusted with the responsibility of identifying the surplus assets of the Company and to authorise sale and disposal of such surplus property. The Committee is fully authorised to take necessary steps to give effect to such sale and transfer of the ownership rights, interest and title in the said property, for and on behalf of the Company. COMPANY POLICIES Preventing Conflict of Interests The Board of Directors is responsible for ensuring that rules are in place to avoid conflicts of interest by Board Members. The Board has adopted the Code of Conduct for the Members of the Board and Senior Management Team. The Code provides that members of the Board are required to avoid any interest in contracts entered into by the Company. If such an interest exists, the members are required to make a disclosure to the Board and abstain from discussion, voting or otherwise influencing decision on any matter in which the concerned Director has or may have such interest. The Code also restricts the Directors from accepting any gifts or incentives in their capacity as Director of the Company, except what is duly authorised under the Company’s Gift Policy.
The members of the Board and the Senior Management Team annually confirm to the Board the compliance with Code of Conduct. This Code is in addition to the Code of Business Principles of the Company. A copy of the said Code of Conduct is available on the website of the Company www.hul.co.in. In addition, the members of the Board also submit, on an annual basis, the details of individuals to whom they are related and entities in which they hold interest and the same are placed before the Board. Transactions with any of the entities referred above are placed before the Board for approval. Details of all related party transactions are placed before the Audit Committee on an annual basis. Code of Business Principles The Code of Business Principles (CoBP) is the Company’s statement of values and represents the standard of conduct which all the employees are expected to meet in their business endeavours. It forms the benchmark against which the world at large is invited to judge Company’s activities. The Code reflects the Company’s commitment to principles, integrity, transparency, and fairness. The copy of the Code of Business Principles can be accessed at the website of the Company www.hul.co.in. The Code of Business Principles of the Company, also sets out the rules for dealing with conflict of interest situations and provides, inter alia, that the proposal for appointment of any Executives of the Company, to serve on outside Boards, whether of commercial ventures or of non-profit making bodies such as trade associations, as Directors, Supervisory Directors, Trustees etc., shall be subject to prior approval from the office of the Chairman or Chief Executive Officer or Executive Director of the Company.
Corporate Governance
Annual Report 2008-09
53
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The Chief Executive Officer through the Management Committee and Business Unit Heads is responsible for ensuring that the Code is understood and implemented throughout the Company. The Code is also applicable to everyone, with whom the Company is associated. UN Global Compact The Company is a signatory to the United Nations Global Compact Programme and is fully committed to the principles of the UN Global Compact which covers human rights, labour practices, environment commitment and prevention of corruption in the Business organisations. The UN Global Compact is a symbol of leadership in a complex business world and provides a forward looking forum in which the United Nations, companies and civil society organisations can come together in an open and transparent dialogue. The Company’s CoBP mechanism upholds these principles in all aspects of our business operations. Whistle Blower Policy The Company has adopted a Whistle Blower Policy to provide appropriate avenues to employees to bring to the attention of the Management any issue which is perceived to be in violation or in conflict with the fundamental business principles of the Company. The Company has provided a dedicated email address whistleblowing.hul@unilever.com for reporting of such complaints. Alternatively, employees can also send written communications to the Company. The employees are encouraged to raise any of their concerns by way of whistle blowing and none of the employees have been denied access to the Audit Committee. The Company Secretary is the designated officer for effective implementation of the policy and complaints registered under the policy. All cases registered under the Code of Business Principles and the
54
Hindustan Unilever Limited
Whistle Blower Policy of the Company are reported to the Committee of Executive Directors and is subject to the review of the Audit Committee. Share Dealing Code In accordance with SEBI (Prohibition of Insider Trading) Regulations, 1992, the Company has established systems and procedures to restrict insider trading activity and has framed Share Dealing Code. The Share Dealing Code of the Company is an important governance code to prevent any insider trading activity by dealing in shares of the Company. The Code restricts the Directors of the Company and other specified employees to deal in the securities of the Company on the basis of any unpublished price sensitive information available to them by virtue of their position in the Company. The objective of this Code is to protect the interest of shareholders at large, to prevent misuse of any price sensitive information and to prevent any insider trading activity by dealing in shares of the Company by its Directors and employees. A copy of the Share Dealing Code of the Company is made available to all the employees of the Company and the compliance of the same is ensured. AFFIRMATION AND DISCLOSURE All the Members of Board and the Management Committee have affirmed their compliance with the Code of Conduct as on 31st March, 2009 and a declaration to that effect signed by the Managing Director and CEO is attached and forms part of this Report. There were no materially significant related party transactions, pecuniary transactions or relationships between the Company and its Directors for the period ended 31st March, 2009 that may have a potential conflict with the interests of the Company at large. All details relating to financial and
commercial transactions where Directors may have a pecuniary interest are provided to the Board, and the interested Directors neither participate in the discussion, nor do they vote on such matters. Transactions with related parties, as per requirements of Accounting Standard 18, are disclosed elsewhere in this Annual Report and they are not in conflict with the interest of the Company at large. DISCLOSURE OF PENDING CASES/ INSTANCES OF NON-COMPLIANCE There were no instances of noncompliance by the Company, penalties and strictures imposed on the Company by the Stock Exchanges, SEBI or any other statutory authority on any matters related to the capital market during the last three years. The Company is involved in certain legal cases related to disputes over title to shares arising in the ordinary course of share transfer operations. However, none of these cases are material in nature which may lead to material loss or expenditure to the Company. COMPLIANCE WITH THE GOVERNANCE FRAMEWORK The Company is in full compliance with all mandatory requirements of Clause 49 of the Listing Agreement. In addition, the Company has also adopted the nonmandatory requirements of constitution of the Remuneration Committee, tenure of office of Independent Directors and establishing of Whistle Blower mechanism.
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SHAREHOLDER INFORMATION General Body Meetings Details of last three Annual General Meetings and the summaries of Special Resolutions passed therein Financial Year Ended 31st December, 2005
Date and Time 29th May, 2006, 3.00 P.M.
Venue
Special Resolutions passed
Birla Matushri Sabhagar, 19, Marine Lines, Mumbai 400 020.
Adoption of a revised ‘2006 HLL Performance Share Scheme’, on terms and conditions stipulated under the revised Scheme. Amendment by way of substitution of Article 169A of Articles of Association of the Company, thereby authorising the Board of Directors to buy-back shares in line with the amendments in Sections 77A, 77AA and 77B of the Companies Act, 1956. Revision in the price of Stock Options granted by the Company on April 24, 2003 to the eligible management employees of the Company from Rs. 136.00 to Rs. 127.24 i.e., an adjustment of Rs.8.76 per share.
31st December, 2006
18th May, 2007, 3.00 P.M.
Birla Matushri Sabhagar, 19, Marine Lines, Mumbai 400 020.
Approval for Change of Name of the Company from ‘Hindustan Lever Limited’ to ‘ Hindustan Unilever Limited’
31st December, 2007
4th April 2008, 3.00 P.M.
Birla Matushri Sabhagar, 19, Marine Lines, Mumbai 400 020.
Approval of revision in remuneration structure for Managing Director/Wholetime Directors of the Company w.e.f. 1st April, 2008, in order to modify the maximum limit of remuneration and authorising the Board to fix remuneration for each Managing Director/Wholetime Directors within such limit.
During the fifteen month period ended 31st March, 2009, no ordinary or special resolutions were passed through postal ballot. Annual General Meeting 2009 Date
Friday, 3rd July, 2009.
Venue
Birla Matushri Sabhagar, 19, Marine Lines, Mumbai 400 020.
Time
2.30 P.M.
Book Closure Date for Final Dividend
Tuesday,16th June, 2009 to Thursday, 2nd July, 2009 (both days inclusive).
Last Date of receipt of Proxy forms
Wednesday, 1st July, 2009 before 2.30 P.M. at the Registered Office of the Company.
Calendar of financial period ended 31st March, 2009 In view of change in financial year, the Company will now pursue 1st April to 31st March as its financial year w.e.f. 1st April, 2009. The Board Meetings for approval of quarterly financial results during the fifteen month period ended 31st March, 2009 were held on the following dates: First Quarter Results Second Quarter and Half Yearly Results Third Quarter Results Fourth Quarter Results Fifth Quarter and 15 Month Results
28th April, 2008 25th July, 2008 24th October, 2008 25th January, 2009 10th May, 2009
The tentative dates of Board Meetings for consideration of financial results for the year ending 31st March, 2010 are as follows: First Quarter Results Second Quarter and Half yearly Results Third Quarter Results Fourth Quarter and Annual Results
Corporate Governance
28th July, 2009 27th October, 2009 28th January, 2010 25th May, 2010
Annual Report 2008-09
55
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Dividend The Board of Directors at their meeting held on 10th May, 2009 recommended a final dividend of Rs.4/- per share on equity shares of face value of Re.1/for the fifteen month period ended on 31st March, 2009, subject to the approval of the shareholders at the Annual General Meeting. Together with the interim dividend of Rs. 3.50 per share paid on 18th August, 2008, the total dividend for the period works out to Rs. 7.50 per share. Final dividend, approved by shareholders, will be paid on or after 6th July, 2009.
Unclaimed Dividends Under the Companies Act, 1956, dividends that are unclaimed for a period of seven years, statutorily get transferred to the Investor Education and Protection Fund (IEPF) administered by the Central Government, and thereafter cannot be claimed by the investors. To ensure maximum disbursement of unclaimed dividend, the Company sends reminders to the concerned investors, before transfer of dividend to IEPF. The unpaid/ unclaimed dividends upto final dividend 1995 (39F) had been
transferred to the General Revenue Account of the Central Government. The Members, who have not claimed their dividend for the said period till date, may claim the amount from the Registrar of Companies - Mumbai. Apart from above, the Company has transferred the unpaid dividends upto Interim Dividend 2001 (46I-IBFL) to the IEPF. The Members of the Company who have not yet encashed their dividend warrant (s) for Final Dividend 2001 – (46F) and thereafter may write to the Company immediately.
Due Dates for Transfer of Unclaimed Dividend to IEPF
Year
2001 2002 2002 2003 2003 2003 2004 2004 2005 2005 2005 2006 2006 2007 2007 2007 2008
F - Final
Dividend
46-F 47-I 47-F 47-S 48-I 48-F 49-I 49-F 50-I 50-I(VDL) 50-F 51-I 51-F 52-I 52-S 52-F 53-I
I - Interim
Number of Warrants
Dividend rate per share (Rs.)
Date of declaration
Issued
2.50 2.50 2.659 1.765 2.50 3.00 2.50 2.50 2.50 2.50 2.50 3.00 3.00 3.00 3.00 3.00 3.50
26-Jun-02 22-Jul-02 13-Jun-03 13-Jun-03 31-Jul-03 29-Jun-04 29-Jul-04 24-Jun-05 30-Jul-05 10-Apr-06 29-May-06 30-Jul-06 18-May-07 29-Jul-07 31-Oct-07 4-Apr-08 25-Jul-08
3,52,240 3,70,239 3,75,782 3,76,369 3,70,088 3,58,576 3,75,081 3,50,630 3,39,914 65,899 3,76,477 3,92,889 4,14,086 4,11,422 3,85,973 3,64,081 3,55,307
Unclaimed as on 31st March 2009 19,035 18,599 18,519 23,530 17,963 17,000 19,637 19,594 19,348 17,053 33,896 32,463 36,989 36,846 35,275 37,050 33,443
Dividend Amount (Rs. lakhs) %
Dividend
5.40 5.02 4.93 6.25 4.85 4.74 5.24 5.59 5.69 25.88 9.00 8.26 8.93 8.96 9.14 10.18 9.41
550,31.09 550,31.09 585,31.07 388,51.95 550,31.09 660,37.31 550,31.09 550,31.22 550,31.22 86.16 551,21.36 661,72.23 662,04.96 662,12.86 660,57.83 653,37.74 762,42.09
Unclaimed as on 31st March 2009 2,30.87 2,08.15 2,51.82 2,18.04 2,14.51 2,38.86 2,44.21 2,53.79 2,80.79 6.50 3,07.00 3,64.20 4,03.46 3,96.11 4,12.96 4,08.12 4,46.44
Due date % 0.42 0.38 0.43 0.56 0.39 0.36 0.44 0.46 0.51 7.50 0.56 0.55 0.61 0.60 0.62 0.62 0.59
24-Jul-09 19-Aug-09 11-Jul-10 11-Jul-10 28-Aug-10 28-Jul-11 27-Aug-11 22-Jul-12 27-Aug-12 8-May-13 26-Jun-13 27-Aug-13 15-Jun-14 26-Aug-14 28-Nov-14 3-May-15 23-Aug-15
S - Special
Due Dates for Transfer of Unclaimed Bonus Debentures Interest/Redemption Amount to IEPF Redemption/ Interest Amounts (Rs. lakhs)
Number of Warrants Year and nature of payment
2004 Interest 2005 Interest 2005 Redemption
56
Date of payment
1-Jul-04 1-Jan-05 1-Jan-05
Hindustan Unilever Limited
Issued 3,49,823 3,46,555 3,46,555
Unclaimed as on 31st March, 2009 21,599 21,159 19,526
%
Net amount
6.17 6.11 5.63
106,92.44 53,36.17 1320,74.63
Unclaimed as on 31st March, 2009 59.93 24.38 5,76.21
Due date % 0.56 0.46 0.44
30-Jun-11 31-Dec-11 31-Dec-11
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Distribution of Shareholding as on 31st March, 2009 Holdings 1 501 1001 5001 10001 20001 30001 40001 50001 100001 and Total
Shareholders Numbers 2,43,890 31,505 52,940 8,852 3,899 961 378 167 276 513 3,43,381
500 1000 5000 10000 20000 30000 40000 50000 100000 Above
Shares % of Total 71.03 9.17 15.42 2.58 1.13 0.28 0.11 0.05 0.08 0.15 100.00
Categories of Shareholders as on 31st March, 2009
Numbers 2,83,65,897 2,45,04,178 12,64,68,632 6,20,08,669 5,35,00,074 2,32,12,435 1,30,16,507 74,80,026 1,88,35,111 182,24,84,548 217,98,76,077
Category
No. of Folios
Unilever and its Associates Mutual Funds & Unit Trust of India Financial Institutions / Banks
9
Insurance Companies
% of Total 1.30 1.12 5.80 2.85 2.45 1.07 0.60 0.34 0.86 83.61 100.00
Shares Held % of (Nos.) Holdings 113,48,49,460 52.06
238
9,97,78,027
4.58
153
28,50,569
0.13
22
22,67,79,821
10.40
587
31,27,69,326
14.35
Bodies Corporate
2,798
5,56,65,380
2.55
NRIs/Foreign Bodies Corporate/Foreign Nationals
3,364
66,32,250
0.30
18
1,23,465
0.01
3,36,192
34,04,27,779
15.62
3,43,381
217,98,76,077
100.00
Foreign Institutional Investors
Unilever and its Associates
Mutual Funds & Unit Trust of India
Financial Institutions/Banks
Insurance Companies
Foreign Institutional Investors
Directors and their Relatives
Directors and their Relatives Resident Individuals & Others
Resident Individuals & Others
Bodies Corporate
Total
NRIs/Foreign Bodies Corporate/Foreign Nationals
Top 10 Shareholders as on 31st March, 2009 (Other than promoters) Sr. No. 1 2 3 4 5 6 7 8 9 10
Name
Holding
Life Insurance Corporation of India The New India Assurance Company Limited LIC of India - Market Plus National Insurance Company Limited The Oriental Insurance Company Limited General Insurance Corporation of India Bajaj Allianz Life Insurance Company Limited Government of Singapore United India Insurance Company Limited Aberdeen Asset Managers Limited Total
12,77,26,675 2,82,48,640 1,90,42,662 1,88,55,505 1,82,39,896 1,77,36,853 1,49,97,074 1,47,35,165 1,24,41,112 1,24,00,000 28,44,23,582
Corporate Governance
% 5.86 1.30 0.87 0.86 0.84 0.81 0.69 0.68 0.57 0.57 13.05
Annual Report 2008-09
57
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Bifurcation of shares held in physical and demat form as on 31st March, 2009 Particulars
No. of Shares
Physical Segment Unilever and its Associates Others Demat Segment NSDL CDSL Total
Percentage
113,48,49,460 8,89,67,768
52.06 4.08
93,20,36,254 2,40,22,595 217,98,76,077
42.76 1.10 100.00
There are no outstanding GDRs/ADRs/Warrants/Convertible Instruments of the Company. Listing Details Name of Stock Exchange : Stock Code Bombay Stock Exchange Limited : 500696 National Stock Exchange of India Limited : HINDUNILVR ISIN : INE030A01027 The listing fee for the fifteen month period ended 31st March, 2009 has been paid to the above Stock Exchanges Share Price Data The monthly high and low prices and volumes of shares of the Company at Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE) for the period ended 31st March, 2009 are as under: Month
BSE Low 170.00 190.00 215.00 229.50 225.50 199.00 191.00 230.75 228.00 185.00 223.60 228.50 239.10 245.75 210.70
High 244.10 229.00 247.55 256.00 254.25 239.25 241.00 251.20 265.00 259.80 253.60 267.00 267.00 271.00 252.00
Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09
Volume 94,87,662 99,69,103 1,63,82,782 74,95,549 87,19,097 66,32,785 1,31,99,556 94,75,539 1,07,14,804 1,89,45,965 1,28,09,454 1,10,48,943 72,00,535 60,04,493 1,18,03,363
NSE Low 169.00 190.00 215.00 228.50 225.50 198.65 190.65 230.10 221.15 185.00 223.60 228.50 238.50 245.70 210.70
High 244.10 229.25 247.95 256.00 254.70 240.00 242.00 251.20 265.50 259.80 255.95 267.80 270.00 271.90 253.10
Volume 5,31,40,865 4,96,55,047 7,76,89,621 4,81,45,754 5,41,03,520 4,71,71,031 7,91,18,223 5,61,38,801 8,44,88,331 15,09,30,805 9,03,32,917 7,23,39,743 6,32,26,936 5,54,59,363 9,20,36,818
Source: Bloomberg
Note: High and low are in rupees per traded share. Volume is the total monthly volume of trade (in numbers) in shares of the Company on the respective Stock Exchange BSE Sensex vs. HUL share price (January 2008 - March 2009)
Hindustan Unilever Limited
25-Mar-09
9-Mar-09
6-Feb-09
20-Feb-09
22-Jan-09
7-Jan-09
8-Dec-08
23-Dec-08
21-Nov-08
6-Nov-08
22-Oct-08
7-Oct-08
8-Sep-08
Sensex 22-Sep-08
22-Aug-08
7-Aug-08
24-Jul-08
10-Jul-08
26-Jun-08
12-Jun-08
29-May-08
14-May-08
29-Apr-08
11-Apr-08
28-Mar-08
12-Mar-08
26-Feb-08
12-Feb-08
29-Jan-08
1-Jan-08
58
15-Jan-08
Hindustan Unilever Limited
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NSE Nifty vs. HUL Share price (January 2008 - March 2009)
25-Mar-09
9-Mar-09
20-Feb-09
6-Feb-09
7-Jan-09
22-Jan-09
23-Dec-08
8-Dec-08
21-Nov-08
6-Nov-08
22-Oct-08
7-Oct-08
22-Sep-08
NIFTY 8-Sep-08
7-Aug-08
22-Aug-08
24-Jul-08
10-Jul-08
26-Jun-08
12-Jun-08
29-May-08
29-Apr-08
14-May-08
11-Apr-08
28-Mar-08
12-Mar-08
26-Feb-08
12-Feb-08
29-Jan-08
15-Jan-08
1-Jan-08
Hindustan Unilever Limited
10 year Performance of Hindustan Unilever Share vis-à-vis Sensex and Nifty
Date of Purchase
HUL Share Price on BSE
January 3, 2000 January 1, 2001
Sensex Performance
HUL Share Price on NSE
HUL Share Performance
NSE Nifty
5375.00
84.3%
224.89
11.5%
1592.20
90.5%
3955.00
150.4%
194.56
28.9%
1254.30
141.8%
13.7%
3246.00
205.1%
215.10
16.6%
1055.30
187.4%
181.65
38.0%
3390.00
192.1%
177.15
41.5%
1100.15
175.7%
212.60
17.9%
5915.00
67.4%
209.49
19.7%
1912.25
58.6%
January 3, 2005
144.35
73.7%
6679.00
48.3%
142.29
76.2%
2115.00
43.4%
January 2, 2006
195.20
28.5%
9390.00
5.5%
192.11
30.5%
2835.95
7.0%
January 2, 2007
216.45
15.8%
13942.00
-29.0%
213.08
17.7%
4007.40
-24.3%
January 1, 2008
218.10
15.0%
20300.00
-51.2%
218.45
14.8%
6144.35
-50.6%
January 1, 2009
250.75
HUL Share Performance
BSE Sensex
239.12
4.9%
200.00
25.4%
January 1, 2002
220.50
January 1, 2003 January 1, 2004
9903.46
250.75
Nifty Performance
3033.45
Source: Bloomberg
All comparisons are with respect to 1st January, 2009 (the reference date). Communication to Shareholders Effective communication of information is an essential component of corporate governance. It is a process of sharing information, ideas, thoughts, opinions and plans to all stakeholders, and promotes management-shareholder relations. The Company regularly interacts with shareholders through multiple channels of communications such as the results announcement, annual report, media releases, Company’s website and other subject specific communications. The quarterly, half-yearly and annual
results of the Company’s performance are published in leading newspapers such as Times of India and Hindu Business Line. These results are also made available on the website of the Company www.hul.co.in. The website also displays vital information relating to the Company and its performance, official press releases and presentation to analysts. The investor’s section of the Company’s website provides more than 50 frequently asked questions on various topics related to transfers and transmission of shares, dematerialisation, nomination,
change of address, loss of share certificates, dividend and sub-division of share certificates. In addition, various downloadable forms required to be executed by the shareholders have also been provided in the website. In compliance with Clause 52 of the Listing Agreement, the Quarterly Results, Shareholding Pattern and all other corporate communication to stock exchanges have been filed under Corporate Filing and Dissemination System (CFDS) and are available at www.corpfiling.co.in
Corporate Governance
Annual Report 2008-09
59
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Investor Services Web-based Query Redressal System Members may utilise the new facility extended by the Registrar and Share Transfer Agents for redressal of their queries. Please visit http://karisma. karvy.com and click on ‘investors’ option for query registration through free identity registration. Investors can submit their query in the ‘QUERIES’ option provided on the website, which would give the grievance registration number. For accessing the status/response to your query, the same number can be used at the option ‘VIEW REPLY’ after 24 hours. The investors can continue to put additional queries relating to the case till they get satisfied. Alternative Dispute Redressal Consumers In a significant step towards placing consumers and stakeholders at the heart of all our business operations, the Company has appointed a retired High Court Judge as the Ombudsman for consumer disputes redressal. This is the first time, an FMCG Company has adopted an independent and expert mediation procedure for the benefit of the consumers. This unique initiative is aimed at resolving issues in a transparent manner. The Company had also set up a consumer care helpline ‘Levercare’ last year to help consumers reach the Company for their
grievances, suggestions, ideas and to help brands reach out to consumers. The Ombudsman shall independently review the merits of the complaint and decide on the issue. The Ombudsman’s decision shall be binding on the Company, though may not be binding on the consumer. We expect that such an independent dispute resolution mechanism will further reinforce our commitment & credibility with our consumers and also set new benchmarks for the industry. Shareholders The Company in the year 2004 had pioneered the mechanism of providing the alternate dispute redressal for shareholders to resolve the shares related disputes pending before the parties by amicable settlement. The Company had started this unique initiative of organising Alternative Dispute Redressal Meetings wherein aggrieved investors come face to face and get a chance to settle their disputes, some of which were pending for years. Such long pending litigations involve significant investment/monetary value of the disputed shares and at the same time accrued dividends/other benefits are locked up unutilised. Further, in terms of requirement of the Companies Act, 1956 such dividends/other specified incomes remaining unclaimed/unpaid for a period of seven years are to be credited to the
Investor Education and Protection Fund and the shareholders are not entitled to claim the same thereafter. The first of such meeting was held in Ahmedabad in the year 2005 wherein 14 cases were resolved by amicable settlement. Similar such meetings were held in the other cities like Mumbai and Kolkata wherein 31 more cases were resolved to the satisfaction of the parties to the dispute. The Company had engaged the services of retired Judges to preside over the meeting in order to give a fair view to each case. A number of shareholders have availed the benefit of this process and the Company through its various initiatives keeps exploring the possibilities of settling such issues. The process helps the investor in releasing the locked up investment and save their time consumed in contesting legal proceedings. The objective of this process is to facilitate quick resolution between the parties. The shareholders who are willing to avail the benefits of Alternative Dispute Redressal Mechanism may approach the Investor Service Department of the Company at the address mentioned below.
Address for Correspondence All Shareholders’ correspondence should be forwarded to Karvy Computershare Pvt. Ltd, the Registrar and Share Transfer Agents of the Company or to the Investor Service Department at the Registered Office of the Company at addresses mentioned below. The Company’s exclusive e-mail address for Investors Complaints is hllshare.cmpt@unilever.com. Karvy Computershare Private Limited Unit : Hindustan Unilever Limited Plot No. 17 to 24, Vittalrao Nagar, Madhapur, Hyderabad - 500 081. Phone : +91 - 40 23420818-828 Fax : +91 - 40 23420814 E-mail : igkcpl@karvy.com Website : www.karvy.com
60
Hindustan Unilever Limited
Hindustan Unilever Limited Investor Service Department 166/166, Backbay Reclamation, Mumbai - 400 020 Phone : +91 - 22-39832452, 32285 Fax : +91 -22- 22026712 Website : www.hul.co.in
Compliance Officer Ashok Gupta Executive Director Legal & Company Secretary E-mail : hllshare.cmpt@unilever.com Phone : +91 - 22- 39832567, 32358, 32557
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Mergers and Demergers Value of fraction (Rs.)
Merger/Demerger
Appointed date
Effective date
Date of allotment
Share ratio
Brooke Bond India Ltd. Brooke Bond India Ltd. Brooke Bond India Ltd. Brooke Bond India Ltd.
1-Jan-92 1-Jan-93 1-Jan-93 1-Apr-93
1-Jan-92 1-Jun-93 1-Jun-93 20-Jan-94
30-Jun-92 24-Aug-93 24-Aug-93 22-Jan-94
21:1 10:12 10:11 1:100
Brooke Bond India Ltd. [Name changed to Brooke Bond Lipton India Ltd.]
1-Jul-93
9-Mar-94
16-May-94
10:9
The Tata Oil Mills Company Ltd. Brooke Bond Lipton India Ltd. Pond’s (India) Ltd. Industrial Perfumes Ltd.
Hindustan Lever Limited# Hindustan Lever Limited# Hindustan Lever Limited# Hindustan Lever Limited#
1-Apr-93 1-Jan-96 1-Jan-98 1-Jan-99
28-Dec-94 21-Mar-97 15-Oct-98 9-Feb-00
5-Apr-95 16-May-97 3-Mar-99 23-Feb-00
15:2 20:9 4:3 5:2
International Bestfoods Ltd. Aviance Limited
Hindustan Lever Limited# Hindustan Lever Limited#
1-Jun-01 1-Jul-01
26-Sep-01 25-Sep-01
Tea Estates India Ltd. (Formerly known as ‘Thiashola Tea Company Limited’) Doom Dooma Tea Company Ltd (Formerly known as ‘Daverashola Tea Company Limited’)
Demerger from Hindustan Lever Limited# Demerger from Hindustan Lever Limited#
1-Apr-05
1-Dec-05
20-Oct-01 Not Applicable 2-Dec-05
3:2* Not Applicable ^
1-Apr-05
1-Dec-05
2-Dec-05
^^
Lever India Exports Limited
Hindustan Lever Limited#
1-Apr-05
30-Dec-05
Lipton India Exports Limited
Hindustan Lever Limited#
1-Jan-05
30-Dec-05
Merryweather Food Products Limited
Hindustan Lever Limited#
1-Jan-05
30-Dec-05
TOC Disinfectants Limited
Hindustan Lever Limited#
1-Apr-05
30-Dec-05
Not Applicable Not Applicable Not Applicable 26-Apr-06
Not Applicable Not Applicable Not Applicable 500:1 **
International Fisheries Limited
Hindustan Lever Limited#
1-Jan-05
30-Dec-05
26-Apr-06
1:1***
Vashisti Detergents Limited Modern Food Industries (India) Limited & Modern Food and Nutrition Industries Limited
Hindustan Lever Limited# Hindustan Lever Limited#
1-Jul-05 1-Oct-06
28-Feb-06 30-Mar-07
10-Apr-06 Not Applicable
10:1**** Not Applicable
Shamnagar Estates Private Limited, Jamnagar Properties Private Limited and Daverashola Estates Private Limited (Formerly known as Hindustan Kwality Walls Foods Private Limited)
Demerger from Hindustan Lever Limited#
1-Nov-06
29-Mar-07
Not Applicable
^^^
Not Applicable
Brooke Limited
Demerger from Hindustan Unilever Limited
1-Apr-08
1-Sep-08
Not Applicable
^^^^
Not Applicable
Name of the Company Kothari General Foods Corporation Ltd. Tea Estates India Ltd. Doom Dooma India Ltd. Kissan Products Ltd. Lipton India Ltd.
Bond
Real
Estates
Private
7.00 35.25 35.25 Not Applicable 48.99
38.86 52.82 525.00 Not Applicable 73.84 Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable 28.00 Not Applicable
* ** *** **** ^
Swap based on Rs.10/- share of International Bestfoods Limited for Re.1/- share of Hindustan Lever Limited Swap based on Rs.5/- share of TOC Disinfectants Limited for Re.1/- share of Hindustan Lever Limited Swap based on Rs.100/- share of International Fisheries Limited for Re.1/- share of Hindustan Lever Limited Swap based on Rs.10/- share of Vashisti Detergents Limited for Re.1/- share of Hindustan Lever Limited 49,50,000 Equity Shares of Rs.10/- each and 10,00,000 Preference Shares of Rs.100/- each were allotted to Hindustan Lever Limited pursuant to the demerger by Tea Estates India Ltd. ^^ 4,88,000 Equity Shares of Rs.100/- each and 10,00,000 Preference Shares of Rs.100/- each were allotted to Hindustan Lever Limited pursuant to the demerger by Doom Dooma Tea Company Ltd. ^^^ 1,50,00,000 Equity shares of Rs. 10/- each were allotted to Hindustan Lever Limited pursuant to demerger, by Shamnagar Estates Private Limited 50,00,000 Equity shares of Rs. 10/- each were allotted to Hindustan Lever Limited pursuant to demerger, by Jamnagar Properties Private Limited 1,71,700 Equity shares of Rs. 10/- each were allotted to Hindustan Lever Limited pursuant to demerger, by Daverashola Estates Private Limited ^^^^ 1,29,36,000 Equity Shares of Rs. 10/- each were allotted to Hindustan Unilelver Limited pursuant to demerger, by Brooke Bond Real Estates Private Limited # Name changed to Hindustan Unilever Limited w.e.f. from 11th June, 2007
Corporate Governance
Annual Report 2008-09
61
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PLANT LOCATIONS As mentioned at page nos. 153 & 154 of this Report. INFORMATION PURSUANT TO CLAUSE 32 OF THE LISTING AGREEMENT Loans and Advances in the nature of loan to subsidiaries Name of the Company Bon Limited (interest free)
Rs. lakhs
42,10.00
Maximum outstanding during the year 42,10.00
4,00.00
10,00.00
–
80.00
15.00
15.00
Balance as at 31st March, 2009
Pond's Exports Limited Hindustan Unilever Field Services Private Limited Brooke Bond Real Estates Private Limited
CHIEF EXECUTIVE OFFICER (CEO) AND CHIEF FINANCIAL OFFICER (CFO) CERTIFICATION To the Board of Directors HINDUSTAN UNILEVER LIMITED We, the undersigned, in our respective capacities as Chief Executive Officer and Chief Financial Officer of Hindustan Unilever Limited (‘the Company’), to the best of our knowledge and belief certify that : (a) We have reviewed the financial statements and the cash flow statement for the period 1st January, 2008 to 31st March, 2009 and based on our knowledge and belief, we state that : (i)
these statements do not contain any materially untrue statement or omit any material fact or contain any statements that might be misleading.
(ii) these statements together present a true and fair view of the Company’s affairs and are in compliance with the existing accounting standards, applicable laws and regulations. (b) We further state that to the best of our knowledge and belief, there are no transactions entered into by the Company during the year, which are fraudulent, illegal or violative of the Company’s code of conduct. We hereby declare that all the members of the Board of Directors and Management Committee have confirmed compliance with the Code of Conduct as adopted by the Company. (c) We are responsible for establishing and maintaining internal controls and for evaluating the effectiveness of the same over the financial reporting of the Company and have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies. (d) We have indicated, based on our most recent evaluation, wherever applicable, to the Auditors and Audit Committee : (i)
significant changes, if any, in the internal control over financial reporting during the year;
(ii) significant changes, if any, in the accounting policies made during the year and that the same has been disclosed in the notes to the financial statements; and (iii) instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having significant role in the Company’s internal control system over financial reporting. Nitin Paranjpe Managing Director & CEO Mumbai, May 10, 2009
62
Hindustan Unilever Limited
D. Sundaram Vice-Chairman & CFO
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CERTIFICATE FROM AUDITORS REGARDING COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE Auditors’ Certificate To the members of Hindustan Unilever Limited, We have examined the compliance of the conditions of Corporate Governance by Hindustan Unilever Limited for the period ended March 31, 2009, as stipulated in clause 49 of the Listing Agreement of the said company with the stock exchanges in India. The compliance of the conditions of Corporate Governance is the responsibility of the Company’s management. Our examination was carried out in accordance with the Guidance Note on Certification of Corporate Governance (as stipulated in Clause 49 of the Listing Agreement), issued by the Institute of Chartered Accountants of India and was limited to the procedures and implementation thereof, adopted by the company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of an opinion on the financial statements of the company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement. We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. Sharmila A. Karve Partner Membership No. 43229 For and on behalf of LOVELOCK & LEWES Chartered Accountants Mumbai May 10, 2009
Corporate Governance
Annual Report 2008-09
63
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Standalone
4*(/*'*$"/5 "$$06/5*/( 10-*$*&4 Basis for preparation of accounts
software) are amortised over the assets’ useful life not exceeding 10
The accounts have been prepared to comply in all material aspects
years. Computer software is amortised over a period of 5 years on the
with applicable accounting principles in India, the applicable Accounting
straight line method.
Standards notified u/s 211(3C) of the Companies Act, 1956 and the
Impairment of Assets
relevant provisions thereof.
Impairment loss, if any, is provided to the extent, the carrying amount of
Revenue Recognition
assets exceeds their recoverable amount. Recoverable amount is higher of
Sales are recognised when goods are supplied and are recorded net
an asset’s net selling price and its value in use. Value in use is the present
of trade discounts, rebates, sales taxes and excise duties (on goods
value of estimated future cash flows expected to arise from the continuing
manufactured and outsourced) but include, where applicable, export
use of an asset and from its disposal at the end of its useful life.
incentives such as duty drawbacks and premiums on sale of import
Investments
licences. It does not include inter-divisional transfers.
Investments are classified into current and long-term investments.
Income from Property Development Activity is recognised in terms of
Current investments are stated at the lower of cost and fair value. Long-
arrangements with developers, where applicable.
term investments are stated at cost. A provision for diminution is made
Income from services rendered is booked based on agreements/
to recognise a decline, other than temporary, in the value of long-term
arrangements with the concerned parties.
investments.
Interest on investments is booked on a time proportion basis taking into
Inventories
account the amounts invested and the rate of interest.
Inventories are valued at the lower of cost, computed on a weighted
Dividend income on investments is accounted for when the right to
average basis, and estimated net realisable value, after providing
receive the payment is established.
for cost of obsolescence and other anticipated
Expenditure
considered necessary. Finished goods and work-in-progress include
Expenses are accounted for on accrual basis and provision is made
costs of conversion and other costs incurred in bringing the inventories
for all known losses and liabilities. Advertising expenses are charged
to their present location and condition.
against the profit of the year to which the activities relate.
Sundry Debtors and Loans and Advances
Revenue expenditure on research and development is charged against
Sundry debtors and Loans and Advances are stated after making
the profit of the year in which it is incurred. Capital expenditure on
adequate provisions for doubtful balances.
research and development is shown as an addition to fixed assets.
losses, wherever
Provisions
Fixed Assets
A provision is recognised when there is a present obligation as a result of
Fixed assets are stated at cost less accumulated depreciation.
a past event, it is probable that an outflow of resources will be required
Depreciation is provided (except in the case of leasehold land which is
to settle the obligation and in respect of which reliable estimate can be
being amortised over the period of the lease) on the straight line method
made. Provision is not discounted to its present value and is determined
and at the rates and in the manner specified in Schedule XIV of the
based on the best estimate required to settle the obligation at the year
Companies Act, 1956. However,
end date. These are reviewed at each year end date and adjusted to
– certain employee perquisite-related assets are depreciated over four
reflect the best current estimate.
to six years, the period of the perquisite scheme. – computers and related assets are depreciated over four years – certain assets of the cold chain are depreciated over four / seven years and
Retirement / Post Retirement Benefits Contributions to Defined Contribution schemes such as Provident Fund, etc. are charged to the Profit and Loss account as incurred. In respect of certain employees, Provident Fund contributions are made to a Trust
– motor vehicles are depreciated over six years
administered by the Company. The interest rate payable to the members
Assets identified and evaluated technically as obsolete and held for
of the Trust shall not be lower than the statutory rate of interest declared
disposal are stated at their estimated net realisable values.
by the Central Government under the Employees Provident Funds and
Goodwill and other Intangible Assets
Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made
Intangible assets are stated at cost of acquisition less accumulated
good by the Company. The remaining contributions are made to a
amortisation. Goodwill and other Intangible assets (except computer
government administered Provident Fund towards which the Company
64
Hindustan Unilever Limited
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Standalone
4*(/*'*$"/5 "$$06/5*/( 10-*$*&4 has no further obligations beyond its monthly contributions. The
Forward exchange contracts outstanding as at the period end on
Company also provides for retirement / post-retirement benefits in the
account of firm commitment/highly probable forecast transaction are
form of gratuity, pensions, leave encashment and medical. Such benefits
marked to market and the resultant gain/loss is dealt in the profit and
are provided for based on valuations, as at the balance sheet date, made
loss account.
by independent actuaries. Termination benefits are recognised as an
Segment Reporting
expense as and when incurred.
The accounting policies adopted for segment reporting are in line with
Taxes on Income
the accounting policies of the company with the following additional
Current tax is determined as the amount of tax payable in respect of
policies for segment reporting :
taxable income for the period.
a) Inter segment revenue have been accounted for based on the
Deferred tax is recognised, subject to the consideration of prudence,
transaction price agreed to between segments which is primarily
on timing differences, being the difference between taxable income and
market led.
accounting income that originate in one period and are capable of reversal
b) Revenue and expenses have been identified to segments on the
in one or more subsequent periods. Deferred tax assets are not recognised
basis of their relationship to the operating activities of the segment.
on unabsorbed depreciation and carry forward of losses unless there is
Revenue and expenses, which relate to the enterprise as a whole
virtual certainty that sufficient future taxable income will be available against
and are not allocable to segments on a reasonable basis, have been
which such deferred tax assets can be realised.
included under ‘Unallocated corporate expenses’.
Foreign Currency Translations Foreign currency transactions are accounted for at the exchange rates prevailing at the date of the transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account.
Financial Statements
Annual Report 2008-09
65
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Standalone
130'*5 "/% -044 "$$06/5 for the 15 months ended 31st March, 2009
Figures in brackets represent deductions Rs. lakhs Notes INCOME Sales Other income Total EXPENDITURE Operating expenses Depreciation Interest Total PROFIT BEFORE TAXATION AND EXCEPTIONAL / EXTRAORDINARY ITEMS Taxation for the year – current tax – deferred tax – fringe benefit tax Taxation adjustments of previous years (net) PROFIT AFTER TAXATION AND BEFORE EXCEPTIONAL / EXTRAORDINARY ITEMS Exceptional/Extraordinary items (net of tax) NET PROFIT Balance brought forward Available for distribution Dividends : On equity shares : Interim - Rs. 3.50 per share - declared on 25th July, 2008 (includes Rs 13.84 lakhs on Final Dividend for 2007) Platinum Jubilee - Rs. 3.00 per share - declared on 31st October, 2007 Final - Rs. 4.00 per share - proposed Tax on distributed profits (includes Rs. 2.35 lakhs on final dividend for 2007) Transfer to General Reserve Balance carried forward Earnings Per Share (Rs.) - Basic (Face value of Re.1 each) - Diluted (Face value of Re.1 each)
For notes, statements, additional information, segment information, related party disclosures and accounting policies See pages: 64, 65, 70 to 73, 93 to 97 and 99 to 107
15 months ended 31st March, 2009
12 months ended 31st December, 2007
20239,33.05 567,78.70 20807,11.75
13675,43.29 431,52.65 14106,95.94
(17561,37.32) (195,30.42) (25,32.29) (17782,00.03) 3025,11.72 (535,85.36) (2.39) (37,06.10) 48,52.70 2500,70.57 (4,25.72) 2496,44.85 197,50.34 2693,95.19
(11796,77.44) (138,35.90) (25,49.66) (11960,63.00) 2146,32.94 (325,95.09) (38,93.00) (40,00.00) 1,67.11 1743,11.96 182,35.02 1925,46.98 803,65.39 2729,12.37
(762,55.93)
(662,30.35)
– (871,95.04) (277,78.50) (250,00.00) 531,65.72 11.46 11.44
(660,57.83) (653,23.90) (355,49.95) (200,00.00) 197,50.34 8.73 8.71
1 2
3-5 6
16 11
13
Signatures to pages : 64 to 66, 70 to 73, 93 to 97 and 99 to 107
In terms of our report of even date Sharmila A. Karve Partner Membership No. 43229 For and on behalf of LOVELOCK & LEWES Chartered Accountants Mumbai : 10th May 2009
66
Hindustan Unilever Limited
Nitin Paranjpe
Managing Director and CEO
D. Sundaram
Vice Chairman and CFO
Ashok Gupta Vivek Subramanian
Executive Director - Legal and Company Secretary Group Corporate Accountant
D. S. Parekh
Chairman, Audit Committee
Mumbai : 10th May 2009
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Standalone
#"-"/$& 4)&&5 as at 31st March, 2009
Figures in brackets represent deductions Rs. lakhs Schedule SOURCES OF FUNDS Shareholders’ funds Capital Reserves and surplus
1 2
As at 31st March, 2009
217,98.76 1843,51.96
As at 31st December, 2007
217,74.63 1221,48.78 2061,50.72
Loan funds Secured loans Unsecured loans
3 4
144,64.93 277,29.78
1439,23.41 25,51.86 63,01.17
421,94.71 2483,45.43 APPLICATION OF FUNDS Fixed assets Gross block Depreciation and impairment loss
2881,73.21 (1274,95.46)
Net block Capital work-in-progress
5
Investments Deferred Tax Deferred Tax Assets Deferred Tax Liabilities Current assets, loans and advances Inventories Sundry debtors Cash and bank balances Other current assets Loans and advances
6
Current liabilities and provisions Liabilities Provisions
1606,77.75 472,07.29
88,53.03 1527,76.44
2669,07.72 (1146,57.39)
2078,85.04
1522,50.33 185,63.75
332,62.02
1440,80.74
14 15
439,08.73 (184,25.61)
7 8 9 10 11
2528,85.76 536,88.72 1777,34.93 15,74.04 742,12.05 5600,95.50
1953,59.86 443,37.46 200,86.21 12,39.25 667,18.17 3277,40.95
12 13
(4255,82.43) (1527,97.82) (5783,80.25)
(3837,08.53) (1273,89.55) (5110,98.08)
Net current assets
For schedules, contingent liabilities, additional information, segment information, related party disclosures and accounting policies See pages : 74 to 92 and 99 to 107
1708,14.08
254,83.12
403,71.06 (191,32.31)
(182,84.75) 2483,45.43
212,38.75
(1833,57.13) 1527,76.44
Signatures to pages : 67, 74 to 92 and 99 to 107
In terms of our report of even date Sharmila A. Karve Partner Membership No. 43229 For and on behalf of LOVELOCK & LEWES Chartered Accountants Mumbai : 10th May 2009
Nitin Paranjpe
Managing Director and CEO
D. Sundaram
Vice Chairman and CFO
Ashok Gupta Vivek Subramanian
Executive Director - Legal and Company Secretary Group Corporate Accountant
D. S. Parekh
Chairman, Audit Committee
Mumbai : 10th May 2009
Financial Statements
Annual Report 2008-09
67
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Standalone
$"4) '-08 45"5&.&/5 for the 15 months ended 31st March, 2009
15 months ended 31st March, 2009 A
CASH FLOW FROM OPERATING ACTIVITIES : Profit before taxation and exceptional / extra-ordinary items Adjustments for : Depreciation Surplus on disposal of investments (net) Provision / (reversal of provision) for diminution in value of investments, net of cost over fair value of current investments (net) Deficit / (Surplus) on disposal of fixed assets (net) Interest income Dividend income Interest expenditure
Operating Profit before Working Capital Changes Adjustments for : Trade and Other Receivables Inventories Trade Payables and Other Liabilities Cash generated from operations Taxes paid (including fringe benefit tax) (net of refunds) Cash flow before exceptional / extraordinary items Exceptional : Compensation paid under Voluntary Separation Schemes and amount paid for an industrial dispute relating to a closed factory Transitional cost due to consolidation of offices / factories Consideration received on sale of a business Amounts paid for other restructuring activities Extraordinary : Consideration received on disposal of a brand Net Cash from Operating Activities.....................................A B
CASH FLOW FROM INVESTING ACTIVITIES : Purchase of fixed assets Sale of fixed assets Purchase of investments Investment in subsidiary companies Sale of investments Interest received Dividend received Cash flow before exceptional / extraordinary items Exceptional : Consideration received on disposal of unused land and building (including residential properties) Consideration received on disposal of a long term investment Net Cash from Investing Activities.......................................B
68
Hindustan Unilever Limited
3025,11.72
Rs. lakhs 12 months ended 31st December, 2007 2146,32.94
195,30.42 (53,90.32) (3,08.70)
138,35.90 (70,65.17) 1,49.76
9,27.41 (80,93.92) (70,71.34) 25,32.29 21,25.84
7,04.27 (64,22.87) (102,98.49) 25,49.66 (65,46.94)
3046,37.56
2080,86.00
(328,92.92) 2717,44.64 (633,65.22) 2083,79.42
(39,83.77) (399,25.98) 561,31.88 122,22.13 2203,08.13 (492,59.87) 1710,48.26
(35,99.30)
(15,79.96)
(16,41.34) – (4,23.77)
(19,56.88) 5,00.00 –
1,50.48 2028,65.49
– 1680,11.42
(636,12.80) 6,64.29 (12482,28.47) (67.75) 13649,74.79 77,59.13 70,71.34 685,60.53
(329,28.17) 40,28.33 (14150,55.48) (2.00) 15148,67.36 70,25.89 102,98.49 882,34.42
172,20.32
141,41.85
20,38.33 878,19.18
– 1023,76.27
(151,87.99) (575,25.90) 398,20.97
Back to 'What's Inside'
Standalone
$"4) '-08 45"5&.&/5 for the 15 months ended 31st March, 2009 (Contd.)
Rs. lakhs 12 months ended 31st December, 2007
15 months ended 31st March, 2009 C
CASH FLOW FROM FINANCING ACTIVITIES : Dividends paid Tax on distributed profits Interest paid Bank overdrafts, etc (net) Proceeds from borrowings Buyback of equity shares Cost in relation to buyback of shares Proceeds from share allotment under Employee Stock Option Scheme Repayments of borrowings Net Cash used in Financing Activities..............................C
(1435,95.79) (240,61.50) (25,32.29) (37,98.72) 1280,86.44 – – 38,11.94 (909,46.03)
Net Increase / (Decrease) in Cash and Cash equivalents....... (A+B+C) Cash and Cash equivalents as at 1st January (Opening Balance)
(1330,35.95)
(1954,47.12) (337,47.40) (25,53.96) 15,31.65 651,28.80 (626,27.25) (5,26.54) 12,36.30 (651,28.80) (2921,34.32)
1576,48.72
(217,46.63)
200,86.21
416,94.30
Cash and Cash equivalents as at 1st January, 2007 of Modern Food Industries (India) Limited
–
1,10.42
Cash and Cash equivalents as at 28th February, 2007 of Daverashola Estates Private Ltd. (on acquisition of Ice-Cream business)
–
28.12
1777,34.93
200,86.21
Cash and Cash equivalents as at period end (Closing Balance)
For notes See page : 98
Signatures to pages : 68, 69 and 98
In terms of our report of even date Sharmila A. Karve Partner Membership No. 43229 For and on behalf of LOVELOCK & LEWES Chartered Accountants Mumbai : 10th May 2009
Nitin Paranjpe
Managing Director and CEO
D. Sundaram
Vice Chairman and CFO
Ashok Gupta Vivek Subramanian
Executive Director - Legal and Company Secretary Group Corporate Accountant
D. S. Parekh
Chairman, Audit Committee
Mumbai : 10th May 2009
Financial Statements
Annual Report 2008-09
69
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/05&4 to the Profit and Loss Account
Rs. lakhs
INCOME 1 Sales Less: Excise duty Sales include duty drawback and licence premium on exports 2
Other income Income from services rendered Interest income - bank and other accounts (gross) (Tax deducted at source Rs 11,74.76 lakhs; 2007 - Rs. 9,89.89 lakhs) Interest income - non trade (gross) (Note 7) (Tax deducted at source Rs. Nil lakhs; 2007 - Rs. 20.85 lakhs ) Interest income - Subsidiary - current (gross) (Tax deducted at source Rs 62.68 lakhs; 2007 - Rs. 51.84 lakhs ) Dividend income - trade - long term (gross) Dividend income - non trade - current (gross) Dividend income - Subsidiaries - long term (gross) (Tax deducted at source Rs. 1,37.98 lakhs; 2007 - Rs. 1,26.47 lakhs ) Surplus on disposal of current investments (net) Miscellaneous income (Note 8.ii)
OPERATING EXPENSES 3 Materials consumed and Purchase of goods Raw materials consumed Packing materials consumed Purchase of goods 4
General expenditure Salaries, wages, bonus, etc. Contribution to provident and other funds Workmen and staff welfare expenses Processing charges Consumption of stores and spare parts Repairs and maintenance - Buildings - Plant - Others Power, light, fuel and water Rent Rates and taxes Insurance Advertising and sales promotion Carriage and freight Agents' commission and brokerage Provision / (write back) for doubtful debts and advances (net) Travelling and motor car expenses Deficit on fixed assets sold, scrapped, etc. (net)
70
Hindustan Unilever Limited
15 months ended 31st March, 2009
12 months ended 31st December, 2007
21649,50.93 (1410,17.88) 20239,33.05 34,20.16
14715,09.70 (1039,66.41) 13675,43.29 16,91.31
277,71.74 59,77.83
180,45.78 40,48.01
18,46.19
21,37.79
2,69.90
2,37.07
11,73.28 44,03.32 14,94.74
9,98.28 80,35.43 12,64.78
53,90.32 84,51.38 567,78.70
70,65.17 13,20.34 431,52.65
6725,24.38 1689,16.64 2845,07.47
4134,70.96 1155,67.64 2122,55.75
1012,94.54 70,87.32 68,29.74 210,40.31 120,56.02 13,50.57 86,93.76 10,35.18 301,37.03 171,88.16 80,20.91 4,90.64 2130,91.55 1136,68.26 10,14.29 15,99.71 203,30.55 9,27.41
664,52.19 51,02.25 52,26.70 136,13.84 87,51.60 9,14.03 67,96.27 11,83.37 198,88.54 120,53.34 47,57.79 7,19.81 1440,21.62 731,41.26 6,06.72 (84.27) 150,34.60 7,04.27
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/05&4 to the Profit and Loss Account (Contd.)
Rs. lakhs
4
5
15 months ended 31st March, 2009
12 months ended 31st December, 2007
1065,92.85 (1,03.34)
740,49.86 (1,10.58)
41,47.41 11.72 811,84.77
31,01.07 84.62 659,43.34
– (186,55.81) (1,75.15) (1099,46.20) 12,76.63 17561,37.32
9.24 (41,47.41) (11.72) (811,84.77) 17,65.51 11796,77.44
General expenditure (contd.) Miscellaneous expenses (Note 10) Expenses shared by subsidiary companies for use of common facilities Stocks Opening stocks : - Work-in-progress - Processed chemicals - Finished goods Adjustment to stocks : - As at 1st January, 2007 of Modern Food Industries (India) Limited Closing stocks : - Work-in-progress (Note 14) - Processed chemicals - Finished goods Excise Duty on Increase/ (Decrease) of Finished goods
6
Interest paid on bank and other accounts Rs. 25,32.29 lakhs (2007 - Rs. 25,49.66 lakhs), including on fixed period loan Rs. 1,00.68 lakhs (2007 - Rs. Nil)
7
Interest income - non trade (gross) comprises of Rs. 17,09.00 lakhs (2007 - Rs. 18,08.54 lakhs) and Rs. 1,37.19 lakhs (2007 - Rs. 3,29.25 lakhs) in respect of long term and current investments respectively.
8
i)
ii)
The net difference in foreign exchange (i.e. the difference between the spot rates on the dates of the transactions, and the actual rates at which the transactions are settled / appropriate rates applicable at the year end) credited to the Profit and Loss Account is Rs.32,67.74 lakhs (2007 - Rs. 17,70.62 lakhs). The above includes gain of Rs 61,22.97 lakhs (2007 - loss Rs. 8,77.02 lakhs) booked under miscellaneous income on account of mark to market valuation of open forward contracts and monetary items (viz. foreign currency receivables and payable) in line with AS - 11. Rs. lakhs
9
15 months ended 31st March, 2009
12 months ended 31st December, 2007
2,56.18 1,25.78 2,11.42 14.70
2,56.18 1,06.74 1,72.18 14.61
6.97 0.05
6.97 0.55
74,46.61
49,38.63
Operating expenses include A) Auditors’ remuneration and expenses i) Audit fees ii) Tax audit fees iii) Fees for other services iv) Reimbursement of out-of-pocket expenses B)
C)
Payments to Cost auditors i) Cost audit fees ii) Reimbursement of out-of-pocket expenses Research and Development expenses
10. Miscellaneous expenses i)
is net of credit for write back of charge in respect of excess of cost over fair value of current investments Rs. 3,08.70 lakhs [2007 charge Rs. 1,49.76 lakhs (net)]
Financial Statements
Annual Report 2008-09
71
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Rs. lakhs
11 Exceptional / Extraordinary Items A) Exceptional Items i) Profit arising from disposal of unused land and building (including residential properties) ii) Profit arising on disposal of a long term investment iii) Reduction in liability for retirement benefits arising from impact of revised interest rates and lower annuity costs iv) Reversal of provision for impairment of sea food export business assets Total exceptional income v) vi) vii) viii)
Provision against advance given to a fully owned subsidiary Provision for remediation of a site Incremental provision for retirement benefits arising out of change in actuarial assumptions, largely due to lower interest rates Restructuring costs across businesses comprising: a) Compensation under Voluntary Separation Schemes and amount payable in an industrial dispute relating to a closed factory b) Transitional cost due to consolidation of offices / factories c) Write-down of fixed assets for closed units d) Other Costs Total exceptional expenditure Net Taxation on the above - Credit / (Charge) on current tax - Credit / (Charge) on deferred tax Total tax credit / (charge) - net Exceptional items (net of tax)
B)
12. i)
72
Extraordinary Items i) Profit arising on disposal of a brand ii) Profit on disposal of assets of a business iii) Profit arising from the transfer of two factory units and land to three separate subsidiaries Total extraordinary income iv) Cost in relation to buyback of shares v) Provision for dimunition in the value of investment in a fully owned subsidiary vi) Loss on acquisition of business from a subsidiary Total extraordinary expenditure Net Taxation on the above - Credit / (Charge) on current tax vii) One time reduction in tax liability arising from amalgamation of Modern Food Industries (India) Limited (a wholly owned subsidiary) with the Company Total tax credit / (charge) - net Extraordinary items (net of tax) Total of Exceptional / Extraordinary Items (A+B)
15 months ended 31st March, 2009
12 months ended 31st December, 2007
167,63.01
139,05.00
18,86.13
–
–
62,98.06
– 186,49.14
5,71.83 207,74.89
(9,29.99) (25,00.00) (60,48.98)
(3,00.00) – –
(67,14.17)
(18,11.90)
(19,05.11) (15,68.68) (6,12.46) (202,79.39) (16,30.25) (21,61.55) 42,46.76 20,85.21 4,54.96
(25,23.88) – – (46,35.78) 161,39.11 (27,25.15) (16,51.78) (43,76.93) 117,62.18
1,50.48 – –
– 4,00.00 22,54.45
1,50.48 – (9,80.01) – (9,80.01) (8,29.53) (51.15) –
26,54.45 (6,00.00) – (46.44) (6,46.44) 20,08.01 (1,12.20) 45,77.03
(51.15) (8,80.68) (4,25.72)
44,64.83 64,72.84 182,35.02
Pursuant to the Scheme of arrangement for demerger of the Brookefields property of the Company to its subsidiary, Brooke Bond Real Estates Private limited with effect from 1st September 2008, as approved by the shareholders in the Court-convened meeting held on 29th April, 2008 and subsequently sanctioned by the Honourable High Court of Bombay on 25th July 2008, the Brookefield property along with other assets has been transferred at cost (book value) to the Subsidiary Company for a consideration in the form of 1,29,36,000 equity shares of face value of Rs.10 each.
Hindustan Unilever Limited
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/05&4 to the Profit and Loss Account (Contd.) ii)
iii)
The Company has changed its accounting year from January - December to April - March with effect from the current year. Accordingly, the current year’s financial statements are for fifteen months from 1st January 2008 to 31st March 2009. The previous year’s figures relate to 12 months ended 31st December 2007. In view of the above, the current year’s figures are accordingly, not comparable to those of the previous year. 15 months ended 31st March, 2009
12 months ended 31st December, 2007
2496,44.85
1925,46.98
Weighted average number of Equity shares outstanding Earnings Per Share (Rs.) - Basic (Face value of Re. 1 per share)
2,17,86,39,191 11.46
2,20,45,77,163 8.73
Weighted average number of Equity shares (including dilutive) outstanding Earnings Per Share (Rs.) - Diluted (Face value of Re. 1 per share)
2,18,31,40,719 11.44
2,21,00,31,876 8.71
13 Earnings Per Share has been computed as under: Net Profit (Rs. lakhs)
14
Closing Stock - Consequent to implementation of SAP transaction system, there has been a standardisation in definition of inventory items leading to their reclassification. The comparable numbers of the previous period are not determinable, hence not regrouped.
15
The Company’s significant leasing arrangements are in respect of operating leases for premises (residential, office, stores, godown etc.) and computers. These leasing arrangements which are not non-cancellable range between 11 months and 10 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent in the profit and loss account (refer Note 4).
16
Taxation adjustments of previous years include interest, etc.
17
For information on Joint Ventures refer Schedule 22 to the Balance Sheet.
18
Previous year’s figures have been regrouped/restated wherever necessary to conform to this year’s classification.
Financial Statements
Annual Report 2008-09
73
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Rs. lakhs
1
As at 31st March, 2009
As at 31st December, 2007
225,00.00
225,00.00
217,98.76
217,74.63
217,98.76
217,74.63
CAPITAL Authorised 2,25,00,00,000 equity shares of Re. 1 each Issued and subscribed 2,17,98,76,077 (2007: 2,17,74,63,355) equity shares of Re. 1 each fully called and paid up Of the above shares i) 1,13,48,49,460
ii)
79,53,79,675
iii)
1,31,68,54,620
Shares of Re. 1 each are held by Unilever PLC., the holding company, and its subsidiaries including 79,48,06,750 shares of Re. 1 each held by Unilever PLC. Shares of Re. 1 each are allotted as fully paid up pursuant to a contract for a consideration other than cash. Shares of Re. 1 each are allotted as fully paid up bonus shares by way of capitalisation of share premium and accumulated profits.
Note: 1.
2.
The Company has granted share options under the Company’s Employees’ Stock Option Scheme and share options outstanding as at 31st March, 2009 are 47,62,792 (2007 - 73,06,750). Of these 8,23,005 (2007 - 12,47,400) options have vested in 2004, 11,92,733 (2007 - 17,59,635) have vested in 2005, 13,03,310 (2007 - 19,06,515) have vested in 2006, 6,27,744 have vested in 2007 (2007 10,67,700) and 8,16,000 have vested in 2008 (2007 - 13,25,500). During the year 24,12,722 (2007 - 9,23,030) options were exercised. During the year, Nil (2007 - 3,02,35,772) equity shares have been bought back pursuant to the buy back programme. Rs. lakhs As at 31st December, 2007
2
Adjustments on Amalgamation
Additions
Deductions
As at 31st March, 2009
RESERVES AND SURPLUS Capital Reserves Capital Reserve Capital Subsidy Capital Redemption Reserve Share Premium Account Revaluation Reserve Other Reserves (c) Employee Stock Options (e) Total Capital Reserves Revenue Reserves Export Profit Reserve Development Allowance Reserve General Reserve Total Revenue Reserves PROFIT AND LOSS ACCOUNT BALANCE
4,22.23 5,03.99 4,17.36
(1,31.28) (1,31.28)
4,22.23 5,03.99 4,17.36 39,19.08 66.59 2,51.05 4,05.38 59,85.68
250,00.00 250,00.00
–
12,21.95 26.72 1239,51.89 1252,00.56
(a) 531,65.72
(b) (197,50.34)
531,65.72
(d) 39,19.08 66.59 2,51.05 5,36.66 21,97.88 12,21.95 26.72 989,51.89 1002,00.56
–
–
197,50.34
39,19.08
TOTAL RESERVES - 31st March, 2009
1221,48.78
–
820,84.80
(198,81.62)
1843,51.96
TOTAL RESERVES - 31st December, 2007
2502,80.51
(180,12.09)
413,40.62
(1514,60.26)
1221,48.78
74
Hindustan Unilever Limited
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RESERVES AND SURPLUS (Contd. )
a) b) c) d)
Transfer from profit and loss account Transfer to profit and loss account Not available for capitalisation / declaration of dividend / share valuation. Comprises Rs 37,87.80 lakhs received on allotment of shares under the Employees Stock Option and transfer of Rs. 1,31.28 lakhs from Employee Stock Option Reserve on account of options exercised.
e)
Employee Stock Options Rs. lakhs
Employee Stock Options Outstanding Less:- Transfer to share premium Employee Stock Options
As at 31st December, 2007
Additions
Deductions
As at 31st March, 2009
7,51.82 (2,15.16) 5,36.66
– – –
– (1,31.28) (1,31.28)
7,51.82 (3,46.44) 4,05.38 Rs. lakhs
3
As at 31st March, 2009
As at 31st December, 2007
25,64.93
25,51.86
119,00.00
–
144,64.93
25,51.86
250,00.00 23,72.37 3,23.24
– 61,84.14 –
34.17
1,17.03
277,29.78
63,01.17
SECURED LOANS Loans and Advances from banks: – Bank overdrafts Secured by hypothecation of stocks, book debts, etc. – Export Packing Credit Secured by a pari passu charge on stocks and book debts
4
UNSECURED LOANS Short - term loans and advances: From Banks – Working capital loan – Overdrawn book balance on current account – Export Packing Credit Other loans and advances – Other than from banks [repayable within one year Rs 24.34 lakhs (2007 - Rs 82.86 lakhs)]
Financial Statements
Annual Report 2008-09
75
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Rs. lakhs GROSS BLOCK Cost/ Valuation as at 31st December, 2007
Cost taken over consequent to amalgamation
56,63.85 33,00.93
DEPRECIATION
NET BLOCK
As at 31st December, 2007
Depreciation taken over consequent to amalgamation
Additions
Deductions/ Transfers (d)
As at 31st March, 2009
As at 31st March, 2009
As at 31st December, 2007
Additions
Deductions/ Transfers (d)
Cost/ Valuation as at 31st March, 2009
–
–
(1,80.74)
54,83.11
–
–
–
–
–
54,83.11
56,63.85
–
–
(7.58)
32,93.35
3,21.52
–
49.60
(3.97)
3,67.15
29,26.20
29,79.41
(21,47.23)
661,19.83
137,08.60
–
20,49.33
(77.46)
156,80.47
504,39.36
494,06.10
(67,11.58) 1720,77.05
737,12.61
–
142,60.60
(50,20.99)
829,52.22
891,24.83
837,69.29
5 FIXED ASSETS Land – Freehold – Lease Hold Buildings (a) Plant & machinery Railway sidings Furniture & Fixtures & Office
631,14.70
–
51,52.36
1574,81.90
–
213,06.73
0.59
–
–
–
0.59
0.59
–
–
–
0.59
–
–
160,42.05
–
9,72.10
(19,15.38)
150,98.77
98,43.98
–
11,07.59
(15,33.98)
94,17.59
56,81.18
61,98.07
144,85.03
–
–
–
144,85.03
144,85.03
–
–
–
144,85.03
–
–
Equipments Trade Marks Goodwill
11,82.29
–
–
–
11,82.29
11,82.29
–
–
–
11,82.29
–
–
Software
52,59.09
–
48,61.43
–
101,20.52
10,90.55
–
20,33.88
–
31,24.43
69,96.09
41,68.54
1.57
(66.19)
(55.95)
2,85.69
26.98
65.07
Motor vehicles Total - 31st March,2009 31st December,2007
3,77.29
–
3,12.67
3,12.22
–
29.42
2669,07.72
–
322,94.19 (110,28.70) 2881,73.21
1146,57.39
–
195,30.42
(66,92.35) 1274,95.46
1606,77.75 1522,50.33
2462,68.85
30,18.47
296,90.51 (120,70.11) 2669,07.72
1061,93.99
18,85.50
138,35.90
(72,58.00) 1146,57.39
1522,50.33
Notes: a) b) c) d)
Buildings include Rs. 2.21 lakhs (2007 - Rs. 2.29 lakhs ) being the value of shares in co-operative housing societies. The title deeds of immovable properties aggregating Rs. 46,21.79 lakhs (2007 - 55,78.10 lakhs), acquired on transfer of business/ undertakings are in the process of being transferred in the name of the Company. Capital expenditure commitments - Rs.132,29.80 lakhs (2007 - 149,80.51 lakhs). Includes transfers, pursuant to the scheme of arrangement for demerger of Brookefields property into Brooke Bond Real Estates Private Limited. Rs. lakhs As at 31st March, 2009
As at 31st December, 2007
1.05
1.05
–
12,14.60
1.05
12,15.65
6 INVESTMENTS (Long term, Unquoted, unless otherwise stated) A
INVESTMENTS IN GOVERNMENT SECURITIES 7 Year National Savings Certificates - II Issue Government of India Stock (2007 - Rs.12,00.00 lakhs) ( Rs.10,00.00 lakhs purchased during the period) (Rs.22,00.00 lakhs sold during the period) (Current Investments) (Quoted) TOTAL - A
76
Hindustan Unilever Limited
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Standalone
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs
6
As at 31st March, 2009
As at 31st December, 2007
2,51.00
2,51.00
5.00
5.00
Ordinary shares of Rs.10 each fully paid Ordinary shares of Rs.10 each fully paid Equity shares of Nepalese Rs.100 each fully paid Equity shares of Rs.10 each fully paid Equity shares of Rs.10 each fully paid Equity shares of Rs.10 each fully paid (50,000 shares purchased during the period) Equity shares of Rs.10 each fully paid
5.00 5.00 4,60.00 10,00.00 9,80.01 5.00
5.00 5.00 4,60.00 10,00.00 9,80.01 –
4,51.42
4,51.42
15,000,000
Equity shares of Rs.10 each fully paid
15,00.00
15,00.00
5,000,000
Equity shares of Rs.10 each fully paid
5,00.00
5,00.00
12,94.60
1.00
63.75
1.00
65,20.78
51,59.43
15,30.70
16,82.80
2.16
2.16
0.05
0.05
INVESTMENTS (Contd. ) (Long term, Unquoted, unless otherwise stated) B Unilever India Exports Limited Levers Associated Trust Limited
INVESTMENTS IN SUBSIDIARY COMPANIES AT COST SHARES 2,510,000 Equity shares of Rs.10 each fully paid 50,000
Levindra Trust Limited Hindlever Trust Limited Unilever Nepal Limited Bon Limited Pond's Exports Limited Lakme Lever Private Limited
50,000 50,000 736,560 10,000,000 9,800,147 50,000
Daverashola Estates Private Limited Shamnagar Estates Private Limited Jamnagar Properties Private Limited Brooke Bond Real Estates Private Limited
221,700
12,946,000
Hindustan Unilever Field Services Private Limited
637,500
C Tata Chemicals Limited Capgemini Business Services (India) Limited Dugdha Sahakari KrayaVikraya Samiti Limited Hi Tech Surfactants Limited Aquagel Chemicals Private Limited
Super Bazar Co-op. Stores Limited Kimberly Clark Lever Private Limited Coffee Futures India Exchange Limited Goldfield Fragrances Private Limited
Ordinary shares of Rs.10 each fully paid
Equity shares of Rs.10 each fully paid (2008-12,936,000 shares allotted pursuant to scheme of arrangementRefer Note 12 (i) 0f Profit & Loss Account) Equity shares of Rs.10 each fully paid (2008-627,500 shares purchased during the period) TOTAL - B
TRADE INVESTMENTS AT COST SHARES 5,032,000 (2007-5,532,000)Equity shares of Rs.10 each fully paid (Quoted) (5,00,000 shares sold during the period) 2,450 Ordinary shares of Rs.100 each fully paid 50
Shares of Rs.100 each fully paid
58,400 284,040
Equity shares of Rs.10 each fully paid Equity shares of Rs.100 each fully paid
5.87 2,65.56
5.87 2,65.56
913,000
7% Cumulative Redeemable Preference Shares of Rs.100 each fully paid Equity shares of Rs.10 each fully paid
9,13.00
9,13.00
0.10
0.10
36,25.00
36,25.00
Equity share of Rs.10,000 each fully paid
0.10
0.10
Equity shares of Rs.100 each fully paid
2.40
2.40
63,44.94
64,97.04
1,000 36,250,000 1 7,164
Equity shares of Rs.10 each fully paid
TOTAL - C
Financial Statements
Annual Report 2008-09
77
Back to 'What's Inside'
Standalone
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs
6
As at 31st March, 2009
As at 31st December, 2007
INVESTMENTS (Contd. ) (Long term, Unquoted, unless otherwise stated) NON-TRADE INVESTMENTS AT COST SHARES, DEBENTURES & BONDS
D Comfund Financial Services India Limited Assam Bengal Cereals Limited
240,000
Equity shares of Rs.10 each fully paid
24.00
24.00
8,284
Equity shares of Rs.10 each fully paid
0.83
0.83
14
6 1/2% Non-redeemable Registered Debentures (Face value Rs.0.14 lakhs)
0.17
0.17
1
5% Non-redeemable Registered Debenture stock (Face value Rs.0.27 lakhs)
0.27
0.27
44
1/2% Debentures of Rs.100 each (Face value Rs.0.05 lakhs : Cost Rs.100)
–
–
– 0.20
– 0.20
10.00
10.00
1.00
1.00
–
–
0.20
0.20
The Bengal Chamber of Commerce & Industry Woodlands Hospital and Medical Research Centre Limited
Shillong Club Limited The Nilgiri Co-operative Enterprises Limited Biotech Consortium India Limited
56 200 100,000
5% Debentures of Rs. 100 each(Cost Rs. Nil) Shares of Rs.100 each fully paid Equity shares of Rs.10 each fully paid
Scooters India Limited
10,000
Annamallais Ropeway Company Limited
1,150
Ordinary shares of Rs.100 each fully paid(Cost Rs. Nil)
Saraswat Co-operative Bank Limited
2,005
Equity shares of Rs.10 each fully paid
National Bank for Agriculture and Rural Development
–
(2007-9,250) 5.50% Capital Gains Bonds of Rs.10,000 each (9,250 bonds Redeemed during the period)
–
9,25.00
–
(2007-870) 5.20% Capital Gains Bonds of Rs.10,000 each (870 bonds Redeemed during the period) (2007-72,000) 5.40% Capital Gains Bonds of Rs.10,000 each (72,000 bonds Redeemed during the period) (2007-13,500) 5.20% Capital Gains Bonds of Rs.10,000 each (13,500 bonds Redeemed during the period) (2007-2,000) 5.42% Capital Gains Bonds of Rs.10,000 each (2,000 bonds Redeemed during the period) (2007-17,484) 5.25% Capital Gains Bonds of Rs.10,000 each (17,484 bonds Redeemed during the period) (2007-15,500) 5.50% Capital Gains Bonds of Rs.10,000 each (15,500 bonds Redeemed during the period)
–
87.00
–
72,00.00
–
13,50.00
–
2,00.00
–
17,48.39
–
15,50.00
213,00.00 50.00
213,00.00 50.00
–
47,43.70
9,90.74
–
– – – – National Housing Bank Rural Electrification Board
– 213,000 500
OTHERS Unit Trust of India
Certificate of Deposit - State Bank of Bikaner & Jaipur
78
Hindustan Unilever Limited
–
–
Equity shares of Rs.10 each fully paid (Quoted)
5.50% Capital Gains Bonds of Rs.10,000 each 5.50% Capital Gains Bonds of Rs.10,000 each Units of Rs.100 each under the 6.75% Tax Free US 64 Bonds (2008-4,877,837 bonds sold during period) (Current Investments) (Quoted) Certificate of Deposit of the face value of Rs.1000.00 lakhs (Rs.1000.00lakhs purchased during the period)
Back to 'What's Inside'
Standalone
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs
6
As at 31st March, 2009
As at 31st December, 2007
INVESTMENTS (Contd. ) (Long term, Unquoted, unless otherwise stated) Fortis Mutual Fund (Formerly known as ABN Amro Mutual Fund)
Birla Mutual Fund
–
(2007-10,000,000 ) Units Fortis Fixed Term Plan - Series 5 - 13 Months - Institutional Plan - Growth (10,000,000 Units sold during the period) (Current Investments)
–
10,00.00
–
Units Fortis Interval Fund - Monthly Plan A - DividendRed (15,000,000 Units Purchased, 162,097 Units cumulated, 15,162,097 Units sold during the period) (Current Investments)
–
–
–
Units Fortis Interval Fund - Quarterly Plan H - DividendRed( 10,000,000 Units Purchased, 179,880 Units cumulated, 10,179,880 Units sold during the period) (Current Investments)
–
–
–
Units Fortis Interval Fund - Series 2 - Quarterly Plan M - Interval Dividend-Red( 39,990,604 Units Purchased, 402,799 Units cumulated, 40,393,403 Units sold during the period) (Current Investments)
–
–
–
Units Birla Sun Life Cash Plus - Institutional Premium Plan - Daily Dividend( 2,283,233,179 Units Purchased, 3,279,250 Units cumulated, 2,286,512,429 Units sold during the period) (Current Investments)
–
–
–
Units Birla Sun Life Cash Plus - Institutional Premium Plan - Weekly Dividend( 31,906,196 Units Purchased, 254,742 Units cumulated, 32,160,938 Units sold during the period) (Current Investments)
–
–
–
Units Birla Sun Life Fixed Term Plan - Series AQ Institutional Plan - Growth( 10,000,000 Units Purchased, 10,000,000 Units sold during the period) (Current Investments)
–
–
–
Units Birla Sun Life Fixed Term Plan - Series AR Institutional Plan - Growth( 5,000,000 Units Purchased, 5,000,000 Units sold during the period) (Current Investments)
–
–
–
(2007-10,000,000 ) Units Birla Sun Life Fixed Term Plan - Series S - Institutional Plan - Growth (10,000,000 Units sold during the period) (Current Investments)
–
10,00.00
–
(2007-20,000,000 ) Units Birla Sun Life Fixed Term Plan - Series T - Institutional Plan - Growth (20,000,000 Units sold during the period) (Current Investments)
–
20,00.00
–
Units Birla Sun Life Interval Income Fund Monthly Plan - Series II - Institutional Plan - Dividend ( 40,000,000 Units Purchased, 291,368 Units cumulated, 40,291,368 Units sold during the period) (Current Investments)
–
–
Financial Statements
Annual Report 2008-09
79
Back to 'What's Inside'
Standalone
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs
6
As at 31st March, 2009
As at 31st December, 2007
INVESTMENTS (Contd. ) (Long term, Unquoted, unless otherwise stated) Birla Mutual Fund
–
Units Birla Sun Life Interval Income Fund Quarterly Plan - Series III - Institutional Plan - Dividend( 25,000,000 Units Purchased, 139,089 Units cumulated, 25,139,089 Units sold during the period) (Current Investments)
–
–
–
Units Birla Sun Life Liquid Plus - Institutional Plan - Daily Dividend( 280,322,206 Units Purchased, 2,065,169 Units cumulated, 282,387,375 Units sold during the period) (Current Investments)
–
–
–
(2007-106,753,740 ) Units Birla Sun Life Liquid Plus Institutional Plan - Weekly Dividend ( 132,057,084 Units Purchased, 3,147,323 Units cumulated, 241,958,147 Units sold during the period) (Current Investments)
–
106,86.99
–
Units DSP BlackRock Cash Plus Fund - Institutional Plan - Daily Dividend( 299,970 Units Purchased, 269 Units cumulated, 300,239 Units sold during the period) (Current Investments)
–
–
–
Units DSP BlackRock Fixed Maturity Plan - 12.5 Months Series 1 - Institutional Plan - Growth ( 35,000,000 Units Purchased, 35,000,000 Units sold during the period) (Current Investments)
–
–
–
Units DSP BlackRock Fixed Maturity Plan - 3 Months Series 10 - Reg - Dividend( 20,000,000 Units Purchased, 359,597 Units cumulated, 20,359,597 Units sold during the period) (Current Investments)
–
–
–
Units DSP BlackRock Fixed Maturity Plan - 3 Months Series 13 - Institutional Plan - Dividend ( 15,000,000 Units Purchased, 15,000,000 Units sold during the period) (Current Investments)
–
–
Deutsche Mutual Fund
–
Units DWS Quarterly Interval Fund - Series 1 - Dividend (30,000,000 Units Purchased, 564,036 Units cumulated, 30,564,036 Units sold during the period) (Current Investments)
–
–
Franklin Templeton Fund
–
(2007-70,000,000 ) Units Templeton Fixed Horizon Fund - Series 1 - 13 Months - Institutional Plan - Growth (70,000,000 Units sold during the period) (Current Investments)
–
70,00.00
–
(2007-30,000,000 ) Units Templeton Fixed Horizon Fund - Series 1 - 15 Months - Institutional Plan - Growth (30,000,000 Units sold during the period) (Current Investments)
–
30,00.00
–
Units Templeton Floating Rate Interest Fund - Liquid Optionng Term - Super Institutional Plan - Daily Dividend (41,348,009 Units Purchased, 797,423 Units cumulated, 42,145,432 Units sold during the period) (Current Investments)
–
–
DSP Blackrock Mutual Fund (Formerly known as DSP Merrill Lynch Fund)
80
Hindustan Unilever Limited
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Standalone
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs
6
As at 31st March, 2009
As at 31st December, 2007
INVESTMENTS (Contd. ) (Long term, Unquoted, unless otherwise stated) Franklin Templeton Fund
HDFC Mutual Fund
–
(2007-220,032 ) Units Templeton India Treasury Management Account - Super Institutional Plan Daily Dividend( 12,472,078 Units Purchased, 15,904 Units cumulated, 12,708,014 Units sold during the period) (Current Investments)
–
22,00.87
–
(2007-20,000,000)Units Templeton Fixed Term fundSeries VII(370Days Yearly Series)-Growth (20,000,000 Units sold during the period) (Current Investments)
–
20,00.00
–
Units Templeton India Treasury Management Account Super Institutional Plan - Weekly Dividend ( 236,127 Units Purchased, 1,966 Units cumulated, 238,093 Units sold during the period) (Current Investments)
–
–
–
Units Templeton India Ultra Short Bond Fund - Super Institutional Plan - Dividend( 49,906,176 Units Purchased, 434,396 Units cumulated, 50,340,572 Units sold during the period) (Current Investments)
–
–
–
Units Templeton Quarterly Interval Fund - Plan C - Institutional Plan - Dividend( 14,982,171 Units Purchased, 311,829 Units cumulated, 15,294,000 Units sold during the period) (Current Investments)
–
–
–
Units HDFC Cash Management Fund - Savings Plan Daily Dividend( 868,095,751 Units Purchased, 1,225,922 Units cumulated, 869,321,673 Units sold during the period) (Current Investments)
–
–
–
(2007-4,497,777 ) Units HDFC Cash Management Fund Savings Plus - Wholesale - Daily Dividend (97,978,456 Units Purchased, 1,682,725 Units cumulated, 104,158,957 Units sold during the period) (Current Investments)
–
4,51.19
–
(2007-9,973,810 ) Units HDFC Floating Rate Interest Fund - Short Term Fund - WP - Daily Dividend( 42,662,373 Units Purchased, 197,048 Units cumulated, 52,833,231 Units sold during the period) (Current Investments)
–
10,05.45
–
(2007-25,000,000 ) Units HDFC Fixed Maturity Plan -14M - March 2007 (3) - Institutional Plan - Growth (25,000,000 Units sold during the period) (Current Investments)
–
25,00.00
–
(2007-18,000,000 ) Units HDFC Fixed Maturity Plan 16M - December 2006 (2) - Institutional Plan - Growth (18,000,000 Units sold during the period) (Current Investments)
–
18,00.00
Financial Statements
Annual Report 2008-09
81
Back to 'What's Inside'
Standalone
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs
6
As at 31st March, 2009
As at 31st December, 2007
INVESTMENTS (Contd. ) (Long term, Unquoted, unless otherwise stated) HDFC Mutual Fund
HSBC Mutual Fund
ICICI Prudential Mutual Fund
82
Hindustan Unilever Limited
–
(2007-35,000,000 ) Units HDFC Fixed Maturity Plan 16M - January 2007 (3) - Institutional Plan - Growth ( 35,000,000 Units sold during the period) (Current Investments)
–
35,00.00
–
Units HDFC Fixed Maturity Plan - 90D - June 2008 (8) - 3 WP - Dividend( 20,000,000 Units Purchased, 398,000 Units cumulated, 20,398,000 Units sold during the period) (Current Investments)
–
–
–
Units HDFC Fixed Maturity Plan - 90D - Sep 2008 (9) - 3 - WP - Dividend( 40,000,000 Units Purchased, 40,000,000 Units sold during the period) (Current Investments)
–
–
–
(2007-35,190,144 ) Units HSBC Cash Fund - Institutional Plus - Daily Dividend( 374,855,063 Units Purchased, 470,253 Units cumulated, 410,515,460 Units sold during the period) (Current Investments)
–
35,20.99
–
Units HSBC Cash Fund - Institutional Plus - Weekly Dividend( 14,949,173 Units Purchased, 53,672 Units cumulated, 15,002,845 Units sold during the period) (Current Investments)
–
–
–
(2007-12,000,000 ) Units HSBC Fixed Term Series 21 -Institutional Plan - Growth( 12,000,000 Units sold during the period) (Current Investments)
–
12,00.00
–
(2007-20,000,000 ) Units HSBC Fixed Term Series 22 Institutional Plan - Growth( 20,000,000 Units sold during the period) (Current Investments)
–
20,00.00
–
(2007-20,000,000 ) Units HSBC Fixed Term Series 25 Institutional Plan - Growth( 20,000,000 Units sold during the period) (Current Investments)
–
20,00.00
–
Units HSBC Interval Fund - Plan II - Institutional - Dividend( 9,999,900 Units Purchased, 9,999,900 Units sold during the period) (Current Investments)
–
–
–
(2007-16,059,751 ) Units HSBC Liquid Plus Fund Institutional Plan Plus - Daily Dividend( 122,968,909 Units Purchased, 1,102,332 Units cumulated, 140,130,992 Units sold during the period) (Current Investments)
–
16,08.00
–
(2007-41,608,345 ) Units ICICI Prudential Flexible Income Plan - Daily Dividend( 809,410,429 Units Purchased 3,278,883 Units cumulated 854,297,657 Units sold during the period) (Current Investments)
–
43,99.46
–
(2007-101,482,721 ) Units ICICI Prudential Flexible Income Plan - Weekly Dividend( 390,308,378 Units Purchased 8,715,586 Units cumulated 503,506,685 Units sold during the period) (Current Investments)
–
107,00.46
Back to 'What's Inside'
Standalone
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs
6
As at 31st March, 2009
As at 31st December, 2007
(2007-30,000,000 ) Units ICICI Prudential Fixed Maturity Plan - S 35 - 13 Months - Plan B - Institutional Plan Growth ( 30,000,000 Units sold during the period) (Current Investments) (2007-35,000,000 ) Units ICICI Prudential Fixed Maturity Plan - Series 34 - 16 Month Plan - Institutional Plan - Growth( 35,000,000 Units sold during the period) (Current Investments)
–
30,00.00
–
35,00.00
–
(2007-25,000,000 ) Units ICICI Prudential Fixed Maturity Plan - Series 37 - 14 Months Plan - Institutional Plan - Growth( 25,000,000 Units sold during the period) (Current Investments)
–
25,00.00
–
Units ICICI Prudential Fixed Maturity Plan - Series 43 - 13M - Plan D - Ret - Growth( 13,000,000 Units Purchased, 13,000,000 Units sold during the period) (Current Investments) Units ICICI Prudential Fixed Maturity Plan - Series 44 3M - Plan A - Ret - Dividend( 20,000,000 Units Purchased, 344,000 Units cumulated, 20,344,000 Units sold during the period) (Current Investments)
–
–
–
–
–
Units ICICI Prudential Fixed Maturity Plan - Series 44 3M - Plan D - Ret - Dividend( 20,000,000 Units Purchased, 386,200 Units cumulated, 20,386,200 Units sold during the period) (Current Investments)
–
–
–
(2007-24,822,026 ) Units ICICI Prudential Interval Fund Monthly Interval II - Dividend(305,781 Units cumulated, 25,127,807 Units sold during the period) (Current Investments) Units ICICI Prudential Interval Fund - Quarterly Interval I Dividend( 29,997,300 Units Purchased, 541,403 Units cumulated, 30,538,703 Units sold during the period) (Current Investments) Units ICICI Prudential Interval Fund II - Quarterly Interval Plan C - Dividend( 40,000,000 Units Purchased, 721,543 Units cumulated, 40,721,543 Units sold during the period) (Current Investments) Units ICICI Prudential Interval Fund IV - Quarterly Interval Plan B - Institutional Plan - Dividend ( 20,000,000 Units Purchased, 20,000,000 Units sold during the period) (Current Investments)
–
25,00.00
–
–
–
–
–
–
–
(2007-12,511,745 ) Units ICICI Prudential Liquid Institutional Plus - Growth( 12,511,745 Units sold during the period) (Current Investments)
–
21,00.00
–
(2007-38,032,109 ) Units ICICI Prudential Liquid Super Institutional Plan - Daily Dividend (3,636,839,370 Units Purchased 3,671,551 Units cumulated 3,678,543,030 Units sold during the period) (Current Investments)
–
38,03.40
INVESTMENTS (Contd. ) (Long term, Unquoted, unless otherwise stated) ICICI Prudential Mutual Fund
–
–
–
–
–
–
Financial Statements
Annual Report 2008-09
83
Back to 'What's Inside'
Standalone
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs
6
As at 31st March, 2009
As at 31st December, 2007
INVESTMENTS (Contd. ) (Long term, Unquoted, unless otherwise stated) Principal Mutual Fund
Reliance Mutual Fund
SBI Mutual Fund
84
Hindustan Unilever Limited
–
Units Principal Cash Management Fund Liquid OptionInstitutional Premium Plan - Daily Dividend ( 594,079,877 Units Purchased, 602,131 Units cumulated, 594,682,008 Units sold during the period) (Current Investments)
–
–
–
Units Principal Floating Rate Fund - Fixed Maturity Plan Institutional Plan - Daily Dividend ( 203,384,641 Units Purchased, 2,403,467 Units cumulated, 205,788,108 Units sold during the period) (Current Investments)
–
–
–
Units Principal Floating Rate Fund - Fixed Maturity Plan -Institutional Plan - Weekly Dividend ( 24,998,231 Units Purchased, 162,757 Units cumulated, 25,160,988 Units sold during the period) (Current Investments)
–
–
–
Units Principal PNB Fixed Maturity Plan 91 Days Yearly Series - Series XVII - Institutional Plan - Dividend (25,000,000 Units Purchased, 25,000,000 Units sold during the period) (Current Investments)
–
–
–
(2007-10,000,000 ) Units Reliance Fixed Horizon Fund 2 - AP - Series 6 - Institutional Plan - Growth ( 10,000,000 Units sold during the period) (Current Investments)
–
10,00.00
–
Units Reliance Fixed Horizon Fund 8 - Series 7 Institutional Plan - Dividend( 50,000,000 Units Purchased, 50,000,000 Units sold during the period) (Current Investments)
–
–
–
(2007-19,983,813 ) Units Reliance Interval Fund Monthly Series I - Institutional Plan - Dividend( 353,412 Units cumulated, 20,337,225 Units sold during the period) (Current Investments)
–
20,00.00
–
(2007-50,281,895 ) Units Reliance Interval Fund - Monthly Series II - Institutional Plan - Dividend ( 49,977,510 Units Purchased, 344,240 Units cumulated, 100,603,645 Units sold during the period) (Current Investments)
–
50,30.89
–
Units Reliance Liquidity Fund - Daily Dividend( 100,316,316 Units Purchased, 8,195 Units cumulated, 100,324,511 Units sold during the period) (Current Investments)
–
–
–
(2007-15,000,000 ) Units SBI Magnum Debt Fund Series - 90 Days Yearly Series - 16 - Oct 07 - Dividend(245,265 Units cumulated, 15,245,265 Units sold during the period) (Current Investments)
–
15,00.00
–
Units SBI Magnum Debt Fund Series - 90 Days Yearly Series - 28 - Aug 08 - Ret - Dividend ( 40,000,000 Units Purchased, 40,000,000 Units sold during the period) (Current Investments)
–
–
Back to 'What's Inside'
Standalone
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs
6
As at 31st March, 2009
As at 31st December, 2007
INVESTMENTS (Contd. ) (Long term, Unquoted, unless otherwise stated) SBI Mutual Fund
–
Units SBI Magnum Debt Fund Series - 90 Days Yearly Series - 29 - Sep 08 - Ret - Dividend ( 40,000,000 Units Purchased, 40,000,000 Units sold during the period) (Current Investments)
–
–
–
Units SBI Premier Liquid Fund - Super Institutional Plan Daily Dividend( 39,870,421 Units Purchased, 167,243 Units cumulated, 40,037,664 Units sold during the period) (Current Investments)
–
–
–
Units IDFC Liquid Fund - Daily Dividend( 111,157 Units Purchased, 68 Units cumulated, 111,225 Units sold during the period) (Current Investments)
–
–
–
Units IDFC-Fixed Maturity Plan - Yearly Series 20 - Plan B Growth( 20,000,000 Units Purchased, 20,000,000 Units sold during the period) (Current Investments)
–
–
–
(2007-10,000,000 ) Units IDFC-Fixed Maturity Plan Yearly Series 3 - Growth( 10,000,000 Units sold during the year) (Current Investments)
–
10,00.00
–
Units Sundaram BNP Paribas Interval Fund - Quarterly Series - Plan B - Institutional Plan - Dividend ( 15,000,000 Units Purchased, 15,000,000 Units sold during the period) (Current Investments)
–
–
–
(2007-5,056,289 ) Units Sundaram BNP Paribas Liquid Plus - Super Institutional Plan - Weekly Dividend ( 168,226 Units cumulated, 5,224,515 Units sold during the period) (Current Investments)
–
5,12.31
Tata Mutual fund
–
(2007-5,000,000 ) Units Tata Fixed Horizon Fund - Series 7 - Plan D - Institutional Plan - Growth ( 5,000,000 Units sold during the period) (Current Investments)
–
5,00.00
UTI Mutual Fund
–
Units UTI - F M P - June 08 - Yearly Series - Institutional Plan - Dividend( 25,000,000 Units Purchased, 460,215 Units cumulated, 25,460,215 Units sold during the period) (Current Investments)
–
–
–
(2007-5,000,000 ) Units UTI Fixed Income Interval Fund Monthly Plan II - Institutional Plan - Dividend (95,044 Units cumulated, 5,095,044 Units sold during the period) (Current Investments)
–
5,00.00
–
Units UTI Fixed Income Interval Fund - Quarterly Plan I - Institutional Plan - Dividend( 15,000,000 Units Purchased, 15,000,000 Units sold during the period) (Current Investments)
–
–
IDFC Mutual Fund (Formerly Known as Standard Chartered Mutual Fund)
Sundaram Mutual fund
Financial Statements
Annual Report 2008-09
85
Back to 'What's Inside'
Standalone
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs
6
As at 31st March, 2009
As at 31st December, 2007
INVESTMENTS (Contd. ) (Long term, Unquoted, unless otherwise stated) UTI Mutual Fund
–
Units UTI Liquid Fund - Cash Plan - Institutional Plan Daily Dividend( 494,158 Units Purchased, 87 Units cumulated, 494,245 Units sold during the period) (Current Investments)
–
–
–
Units UTI Short Term - Fixed Maturity Plan - Series 9 Institutional Plan - Dividend( 30,000,000 Units Purchased, 30,000,000 Units sold during the period) (Current Investments)
–
–
TOTAL-D
223,77.41
1322,10.77
TOTAL A+B+C+D
352,44.18
1450,82.89
(19,82.16)
(10,02.15)
332,62.02
1440,80.74
317,30.32 15,31.70
1364,38.64 76,42.10
332,62.02
1440,80.74
Provision for diminution in value of long term investments TOTAL Aggregate book value of investments
Unquoted Quoted - Market Value Rs.71,08.70 lakhs (2007 - Rs.287,83.32 lakhs) TOTAL
Rs. lakhs
7
As at 31st March, 2009
As at 31st December, 2007
38,96.59 1080,02.14 121,61.10 186,55.81 1,75.15 1099,46.20 48.77 2528,85.76
30,22.27 967,05.92 102,39.00 41,47.41 11.72 811,84.77 48.77 1953,59.86
INVENTORIES (at lower of cost and net realisable value) (refer Note 14) Stores and spare parts, etc. Raw materials Packing materials Work-in-progress Processed chemicals Finished goods Property Development Activity - Work-in-progress
86
Hindustan Unilever Limited
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4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs As at 31st March, 2009 8
SUNDRY DEBTORS (unsecured) Considered good Over 6 months old Others
26,46.79 510,41.93
Considered doubtful Over 6 months old Others
- on current accounts - on deposit accounts
(68,75.92) 536,88.72
(62,12.20) 443,37.46
87.53 189,71.91 1586,75.49 1777,34.93
1,08.81 199,02.57 74.83 200,86.21
15,74.04 15,74.04
12,39.25 12,39.25
24,47.31
36,14.80 39,50.00 75,64.80 (39,50.00) 36,14.80
OTHER CURRENT ASSETS Income accrued on investments and deposits
11
68,75.92 605,64.64
62,12.20 – 62,12.20 505,49.66
CASH AND BANK BALANCES Cash on hand With Scheduled banks
10
536,88.72
23,85.27 419,52.19 443,37.46
68,75.92 –
Less: Provision for doubtful debts 9
As at 31st December, 2007
LOANS AND ADVANCES (Unsecured, considered good unless otherwise stated) Advances and loans to subsidiaries Considered good Considered doubtful
24,47.31 48,80.00 73,27.31 (48,80.00)
Less: Provision for doubtful advances
Advances recoverable in cash or in kind or for value to be received including :Rs. 133,83.18 lakhs (2007 - Rs. 136,06.42 lakhs) not due within one year
561,14.91
468,14.96
Considered doubtful
39,97.96 601,12.87 (39,97.96)
30,61.98 498,76.94 (30,61.98) 468,14.96 162,88.41 – – 667,18.17
Less: Provision for doubtful advances Deposits with Customs, Port Trust, Excise, etc. Current taxation (payments in excess of provision, including tax on distributed profits) Fringe Benefit Taxation (payments in excess of provision)
Financial Statements
561,14.91 138,94.82 12,68.66 4,86.35 742,12.05
Annual Report 2008-09
87
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4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs As at 31st March, 2009 12
LIABILITIES Acceptances Sundry creditors (Schedule 21) Security advances Dividends declared pending payment / encashment
13
598,54.80 871,95.04 – – 57,47.98 1527,97.82
548,50.41 653,23.90 18,31.42 15,45.03 38,38.79 1273,89.55
216,46.13 146,18.76 76,43.84 439,08.73
209,22.60 136,35.94 58,12.52 403,71.06
184,25.61 184,25.61
191,32.31 191,32.31
DEFERRED TAX LIABILITIES On fiscal allowances
16
880,25.03 2878,46.23 9,35.46 69,01.81 3837,08.53 *
DEFERRED TAX ASSETS On employee separation and retirement On other timing differences Other items
15
883,60.18 3305,00.34 18,36.06 48,85.85 4255,82.43 *
* There is no amount due and outstanding to be credited to Investor Education and Protection Fund PROVISIONS Provision for retirement/post retirement benefits and other employee benefits Proposed dividend Current taxation (provisions in excess of payments) including tax on distributed profits Fringe Benefit Taxation Miscellaneous provisions (Schedule 19)
14
As at 31st December, 2007
Certain demands for increased wages, etc. received from workmen have been referred to adjudication. In the opinion of the Company’s management, the ultimate liability to the Company, if any, with respect to such demands would not have a material effect on the accounts.
88
Hindustan Unilever Limited
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4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs Gratuity 2009
17
Management Pension 2007
2009
Post Retirement Medical Benefits
Officers Pension
2007
2009
2007
2009
2007
DEFINED BENEFIT PLANS As per Actuarial Valuation as on 31st March, 2009 and recognised in the financial statements in respect of Employee Benefit Schemes : I Components of Employer Expense (a) Current Service Cost
5,89.50
4,50.80
15,31.25
15,28.99
1,42.50
1,49.90
3,30.63
19.20
(b) Interest Cost
8,84.69
6,87.79
49,37.01
40,72.70
2,57.29
2,37.59
13,78.04
81.60
(c) Expected Return on Plan Assets
(7,92.11)
(6,26.90)
(9,80.55)
(7,46.79)
(5,50.58)
(4,23.34)
–
–
(d) Curtailment Cost/(Credit)
–
–
–
–
–
–
–
–
(e) Settlement Cost/(Credit)
–
–
(3,22.32)
–
–
–
–
–
(f) Past Service Cost
–
–
–
–
–
–
–
–
(g) Actuarial (Gain)/Loss
14,55.54
–
53,53.33
(74,62.04)
(43.04)
–
(4,77.25)
11,63.98
(h) Total expense/(gain) recognised in the Profit & Loss Account
21,37.62
5,11.69
105,18.72
(26,07.14)
* (1,93.83)
* (35.85)
12,31.42
12,64.78
141,45.30
Note: * (Gain not recognised in Profit and loss account as the funds are lying in an Income Tax approved irrevocable trust fund) II Net Asset /(Liability) recognised in Balance Sheet as at 31st March, 2009 (a) Present Value of Obligation as at 31st March, 2009 (b) Fair Value of Plan Assets as at 31st March, 2009 (c) (Asset)/Liability recognised in the Balance Sheet (Refer note) Note: * The excess of assets over liabilities in respect of Gratuity and Officer’s Pension have not been recognised as they are lying in an Income Tax approved irrevocable trust fund.
101,78.20
99,20.60
545,88.47
519,85.10
27,98.20
26,89.20
148,51.70
(101,78.20)
(100,62.64)
(114,99.84)
(129,53.60)
(67,42.43)
(64,39.60)
–
–
*
–
430,88.63
390,31.50
–
148,51.70
141,45.30
11,60.93
–
*
–
*
III Change in Defined Benefit Obligations (DBO) during the year ended as on 31st March, 2009 (a) Present Value of Obligation as at 31st December, 2007
99,20.60
103,01.83
519,85.10
569,00.82
26,89.20
33,80.44
141,45.30
(b) Current Service Cost
5,89.50
4,50.80
15,31.25
15,28.99
1,42.50
1,49.90
3,30.63
19.20
(c) Interest Cost
8,84.69
6,87.79
49,37.01
40,72.70
2,57.29
2,37.59
13,78.04
81.60
(d) Curtailment Cost/(Credit)
–
–
–
–
–
–
–
–
(e) Settlement Cost/(Credit)
–
–
(51,06.63)
–
–
–
–
–
(f) Plan Amendments
–
–
–
–
–
–
–
–
(g) Acquisitions (h) Actuarial (Gain)/Loss
–
–
–
–
–
–
–
–
16,31.74
(3,58.84)
63,83.43
(57,11.71)
1,67.07
(6,37.63)
(4,77.25)
11,63.98
(28,48.33)
(11,60.98)
(51,41.69)
(48,05.70)
(4,57.86)
(4,41.10)
(5,25.00)
(10,16.01)
101,78.20
99,20.60
545,88.47
519,85.10
27,98.20
26,89.20
148,51.73
141,45.30
100,62.64
103,02.70
129,53.60
121,72.98
64,39.60
63,01.03
–
–
–
–
–
–
–
–
–
–
(c) Expected Return on Plan Assets
7,92.11
6,26.90
9,80.55
7,46.79
5,50.58
4,23.34
–
–
(d) Actuarial Gain/(Loss)
1,76.20
2,94.02
10,30.11
17,50.33
2,10.11
1,56.33
–
–
–
–
(47,84.31)
–
–
–
–
–
19,95.58
–
64,61.58
30,89.20
–
–
5,25.00
10,16.01
(i) Benefits Paid (j) Present Value of Obligation as at 31st March, 2009 Note: The Present Value of Obligation as at 31st December, 2007 for Post Retirement Medical Benefits Include Rs.127,35.60 lakhs adjusted to General Reserve on adoption of AS 15 ( Revised) IV Changes in the Fair value of Plan Assets (a) Present Value of Plan Assets as at 31st December, 2007 (b) Acquisition Adjustment
(e) Assets distributed on settlements (f) Actual Company Contribution (g) Benefits Paid (h) Fair Value of Plan Assets as at 31st March 2009
(28,48.33)
(11,60.98)
(51,41.69)
(48,05.70)
(4,57.86)
(4,41.10)
(5,25.00)
(10,16.01)
101,78.20
100,62.64
114,99.84
129,53.60
67,42.43
64,39.60
–
–
Financial Statements
Annual Report 2008-09
89
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4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs Gratuity 2009
17
Management Pension 2007
2009
Post Retirement Medical Benefits
Officers Pension
2007
2009
2007
2009
2007
DEFINED BENEFIT PLANS (Contd. )
V Actuarial Assumptions (a) Discount Rate (per annum)
6.50%
7.75%
6.50%
7.75%
6.50%
7.75%
6.50%
(b) Expected Rate of Return on Assets (per annum)
7.00%
7.00%
7.00%
7.00%
7.00%
7.00%
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
12.00%
12.00%
(c) Annual Increase in Healthcare Costs (per annum)
7.75%
The estimates of future salary increases, considered in actuarial valuation,take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. VI Effect of Increase or Decrease in Healthcare costs Effect of 1% increase in Healthcare Costs on - the aggregate of service cost and interest cost - Defined Benefit Obligation
89.71
1,01.97
13,36.65
12,73.10
Effect of 1% decrease in Healthcare Costs on - the aggregate of service cost and interest cost - Defined Benefit Obligation
(96.42)
(1,32.82)
(12,26.29)
(11,68.00)
VII Percentage of each Category of Plan Assets to total Fair Value of Plan Assets as at 31st March, 2009 (a) Government of India Securities
20.00%
22.00%
–
–
–
–
–
–
(b) Corporate Bonds
22.00%
15.00%
–
–
–
–
–
–
–
58.00%
–
–
–
–
–
–
58.00%
–
100.00%
100.00%
100.00%
100.00%
–
–
–
5.00%
–
–
–
–
–
–
141,45.30
(c) Bank Deposits (Special Deposit Scheme, 1975) (d) Administered by Life Insurance Corporation of India (e) Others VIII Experience Adjustments Defined Benefit Obligation
101,78.20
99,20.60
545,88.47
519,85.10
27,98.20
26,89.20
148,51.70
Plan Assets
101,78.20
100,62.64
114,99.84
129,53.60
67,42.43
64,39.60
–
–
–
(1,42.04)
430,88.63
390,31.50
(39,44.23)
(37,50.40)
148,51.70
141,45.30
Deficit/ (Surplus)
18
Experience adjustments on plan liabilities
3,62.04
74.46
11,84.43
8,35.09
(44.73)
(3,89.53)
8,09.33
–
Experience adjustments on plan assets
1,76.20
2,94.02
10,30.11
17,50.33
2,10.11
1,56.33
–
–
DERIVATIVE INSTRUMENTS The Company uses forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments.The Company does not enter into any derivative instruments for trading or speculative purposes. The forward exchange contracts outstanding as at 31st March, 2009 are as under : Currency exchange
GBP/INR
THB/INR
USD/INR
THB/USD
AUD/USD
EUR/USD
GBP/USD
JPY/USD
CAD/USD
SGD/USD
–
–
1,05
1
3
15
1
–
5
1
–
–
(1)
(1,06)
–
(2)
(2)
–
(1)
–
–
(1)
a Number of ‘buy’ contracts
b Aggregate currency amount (lakhs)
c Number of ‘sell’ contracts
d Aggregate currency amount (lakhs)
90
Hindustan Unilever Limited
SEK/USD
–
–
13,68.53
84.58
31.84
49.63
0.60
–
10.29
0.95
–
–
(1,50.06)
(24,02.40)
–
(1,37.71)
(27.96)
–
(15,34.23)
–
–
(18.85)
2
–
38
–
–
19
4
2
–
–
–
(1)
–
(79)
–
(1)
(2)
(1)
(2)
–
–
–
90.69
–
5,84.05
–
–
47.67
2.96
6,22.62
–
–
–
(69.44)
–
(16,09.46)
–
(1.50)
(52.40)
(5.00)
(27,77.12)
–
–
–
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Standalone
4$)&%6-&4 to the Balance Sheet (Contd.) Currency exchange
18
GBP
USD
THB
AUD
EUR
CHF
JPY
CAD
SGD
SEK
DERIVATIVE INSTRUMENTS (Contd. ) The foreign currency exposures not hedged as at the year end are as under: Net Unhedged Exposure in currency (Lakhs)
0.40
0.06
–
0.03
0.25
0.00
4.70
–
0.55
–
(0.20)
(0.20)
–
(0.10)
(0.20)
(0.10)
(16.00)
–
–
(1.10)
(figures in bracket pertain to 2007)
Rs. lakhs As at 1st January, 2008
Provision made during the year
Amounts utilised / reversed during the year
As at 31st March, 2009
19 PROVISIONS Miscellaneous provisions 38,38.79 25,00.00 Future cash outflow in respect of the above is determinable only on occurrrence of uncertain future events.
(5,90.81)
57,47.98 Rs. lakhs
20
As at 31st March, 2009
As at 31st December, 2007
Income - tax matters
274,46.49
258,86.03
Sales tax matters - gross Rs.202,91.46 lakhs (2007 - Rs. 271,56.16 lakhs) net of tax
133,94.39
179,25.78
Excise and Customs duty matters-gross Rs.86,32.85 lakhs (2007 - Rs. 72,78.03 lakhs) net of tax
56,98.54
48,04.23
8,32.37
7,67.65
52.52
52.52
CONTINGENT LIABILITIES
a) Claims made against the Company not acknowledged as debts
Other matters - gross Rs. 12,60.98 lakhs (2007 - Rs. 11,62.93 lakhs) net of tax b) Guarantees given to Banks etc. in respect of third parties
Note: Future cash outflows in respect of (a) above are determinable only on receipt of judgements/decisions pending with various forums/ authorities. 21
MICRO AND SMALL SCALE BUSINESS ENTITIES There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2009. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.
22
INTERESTS IN JOINT VENTURES The Company’s interests, as a venturer, in jointly controlled entities (Incorporated Joint Ventures) are :
Country of Incorporation Name Kimberly - Clark Lever Private Limited
Percentage of ownership interest as at 31st March, 2009
Percentage of ownership interest as at 31st December, 2007
50%
50%
India
Financial Statements
Annual Report 2008-09
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4$)&%6-&4 to the Balance Sheet (Contd.) 22
INTERESTS IN JOINT VENTURES : (Contd. )
The Company’s interests in these Joint Ventures are reported as Long Term Investments (Schedule 6) and stated at cost. However, the Company’s share of each of the assets, liabilities, income and expenses, etc. (each without elimination of, the effect of transactions between the Company and the joint venture) related to its interests in these joint ventures, based on audited financial statements are : Rs. lakhs
I ASSETS 1. Fixed Assets 2. Investments 3. Current Assets, Loans and Advances a) Inventories b) Sundry Debtors c) Cash and Bank Balances d) Other Current Assets e) Loans and Advances II LIABILITIES 1. Secured Loans 2. Deferred Tax Net 3. Current Liabilities and Provisions a) Liabilities b) Provisions
As at 31st March, 2009
As at 31st December, 2007
18,53.97 –
12,33.13 –
21,66.02 4,51.05 26,77.40 22.07 21,12.46
11,14.43 2,96.96 44,80.82 2,61.20 19,29.78
– (1,38.16)
– (1,60.97)
(28,44.52) (16,57.99)
(26,30.69) (16,19.88) Rs. lakhs
III INCOME 1. Sales (net of excise duty) 2. Other Income IV EXPENSES 1. Operating Expenses 2. Depreciation 3. Interest 4. Provision for Taxation (including deferred taxation) 5. Exceptional Items V OTHER MATTERS Contingent Liabilities 23
For the fifteen month period ended on 31st March, 2009
For the year ended 31st December, 2007
101,89.25 5,77.04
70,37.82 3,73.34
(101,30.55) (1,83.22) – (15.27) –
(63,27.68) (1,31.51) – (3,51.07) –
–
–
Previous year’s figures have been regrouped wherever necessary to conform to this year’s classification.
92
Hindustan Unilever Limited
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45"5&.&/54 forming part of the Profit and Loss Account Licensed / IEM Capacity
Installed Capacity
As at 31st As at 31st March, 2009 December, 2007 Tonnes 1
a) b) c) d) e) f) g) h) i)
As at 31st As at 31st March, 2009 December, 2007
Tonnes
Tonnes
Soaps 3,83,471 3,83,471 1,69,744 2,29,834 Synthetic detergents (f) 11,70,853 10,64,186 2,94,013 3,08,669 Personal products 3,36,529 3,33,195 1,08,624 76,325 Glycerine 13,953 13,953 5,000 2,833 Fabric softener 2,833 2,833 – 4,281 Fatty acids 90,000 90,000 65,000 60,000 Perfumery and cosmetic products (units) * 29,90,00,000 29,90,00,000 5,50,00,000 3,37,50,000 Perfumery and cosmetic products * 3,022 3,022 – 3,136 Packet Tea below 1kg.and tea bags * 5,000 5,000 – – Instant Tea / Coffee 9,833 1,500 4,553 1,920 Frozen Surimi, Fresh and Frozen fish, Mollusees etc. 16,500 16,500 16,500 16,500 Ice-cream/Frozen desserts (Million Litres) * (g) 61 61 17 17 Packed Tea * N.A. N.A. 1,57,000 1,62,138 Packed Coffee * N.A. N.A. 22,060 10,500 Scourers N.A. N.A. 43,569 33,467 Surface Cleaners (Litres) * N.A. N.A. 1,00,00,000 1,00,00,000 N.A. - Signifies the Non Scheduled activities for which Industrial License / IEMs are not required. Licensed capacities include registered capacities of industrial activities existing prior to the Industries (Development and Regulation) Act, 1951 and capacities as shown in the Industrial Entrepreneurs Memorandum (IEM) filed with the Government pursuant to Notification no. 477(E) dt.27.07.1991 under the said Act. The installed capacities are as per certificate given by a Director on which the auditors have relied. The capacity mentioned is annual capacity based on maximum utilisation of plant and machinery. Licensed and installed capacities for the year indicated above include capacities of entities post merger and closed units. Synthetic detergents includes Laundry Soap Capacities. Ice-creams and Frozen Desserts are alternate capacities. Figures of Licensed / IEM Capacities have been corrected based on the available Licenses / IEMs. * Represent capacities on 3 shift basis. 15 Months Ended 31st March, 2009
12 Months Ended 31st December, 2007
Tonnes 2
** a)
b)
Tonnes
LICENSED/INSTALLED ANNUAL CAPACITIES ON SINGLE SHIFT BASIS (UNLESS OTHERWISE STATED)
Tonnes
PRODUCTION Processed triglycerides – ** 3,671 ** Soaps (Million nos.) 4,364 ** 3,356 ** Synthetic detergents 11,06,915 ** 9,04,081 ** Personal Products ('000 nos.) 65,48,242 42,23,573 Glycerine : Refined 4,166 ** 3,677 ** Packed Tea 80,140 ** 64,830 ** Instant Tea 1,508 1,226 Packed Coffee 20,126 ** 21,407 ** Processed Foods 28,624 21,880 Canned and Processed Fruits and Vegetables 44,567 ** 34,533 ** Frozen Desserts & Ice cream (Million Litres.) 16 12 Includes: Third party processing : Soaps - 382 Million Nos (2007 - 133 Million Nos), Synthetic detergents - 5,27,686 tonnes (2007 - 3,94,373 tonnes), Glycerine: Refined 2,325 tonnes (2007 - 2,008 tonnes), Packed Tea - 4,917 tonnes (2007 - 12,833 tonnes), Packed Coffee - 12,119 tonnes (2007 - 13,649 tonnes), Canned and Processed Fruits and Vegetables - 25,879 tonnes (2007 - 16,557 tonnes). Processing in leased units: Processed triglycerides - Nil tonnes (2007 - 3,671 tonnes).
Financial Statements
Annual Report 2008-09
93
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45"5&.&/54 forming part of the Profit and Loss Account (Contd.) 15 Months Ended 31st March, 2009 Tonnes 3
12 Months Ended 31st December, 2007 Rs. lakhs
Tonnes
4301,90.21
3,792 11 11,95,644 1,472 1,24,30,657 1,68,997 93,917 24,851 17 15,912 2,799 33,337 2,51,120 7,234 1,847
Rs. lakhs
SALES (INCLUDING EXPORTS) Soaps (Million nos.) Synthetic detergents Personal Products ('000 nos.) Tea Coffee Frozen Desserts & Ice Creams (Million Litres.) Processed triglycerides/hydrogenated oils/vanaspati Canned and Processed Fruits and Vegetables Branded Staple Foods (a) Speciality Chemicals (b)
4,535 13 15,28,391 2,225 1,67,59,728 1,81,624 1,27,878 26,173 22 2,380 – 47,175 2,65,996 8,514 1,486
* 4908,46.39 * 5616,13.03 * 2156,72.09 645,14.26 229,44.55 18,48.39 * 483,05.80 385,36.83 54,19.83 *
3040,80.37 * 2955,16.14 * 3860,79.53 * 1551,21.38 478,63.06 158,49.46 77,97.86 * 292,91.93 277,28.46 31,77.09 *
1440,41.67 20239,33.05
Others (c)
950,38.01 13675,43.29
Notes : a) Branded staple foods includes breads, wheat flour, iodised salt and rice in consumer packs. b) Speciality Chemicals comprises Glycerine and Fine Chemicals. c) Others includes Scourers, Marine products, Agri commodities, Water, Ayush services etc. * Figures denote quantities used for captive consumption/reprocessing/sales promotion. As at 31st March, 2009 4
As at 31st December, 2007
Tonnes
Rs. lakhs
Tonnes
Rs. lakhs
Tonnes
Rs. lakhs
– 400 65,302 16,77,502 8,471 1,594
– 270,29.83 180,97.18 378,65.51 109,03.26 25,89.22 136,36.35 1101,21.35
282 275 51,937 15,62,692 6,337 1,239
1,17.39 202,11.94 153,47.47 303,72.06 60,01.81 20,25.89 71,19.93 811,96.49
998 330 47,062 11,99,500 7,213 1,299
3,61.19 192,00.65 126,76.68 199,29.46 62,85.72 14,67.25 61,07.01 660,27.96
CLOSING STOCKS (INCLUDING PROCESSED CHEMICALS) Processed triglycerides Soaps (Million nos.) Synthetic detergents Personal Products ('000 nos.) Tea Coffee Others
15 Months Ended 31st March, 2009 5
As at 31st December, 2006
12 Months Ended 31st December, 2007
Tonnes
Rs. lakhs
Tonnes
Rs. lakhs
3,39,192 14,11,011 1,17,606 27,247
1440,86.33 3292,48.59 1059,66.47 268,43.63 663,79.36 6725,24.38
2,83,479 11,23,943 83,153 25,706
926,01.00 1917,22.49 595,05.13 210,48.65 485,93.69 4134,70.96
RAW MATERIALS CONSUMED @ Oils, fats and rosins Chemicals and perfumes Tea Coffee Others
@ Relates to the Company’s main products and principal raw materials.
94
Hindustan Unilever Limited
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45"5&.&/54 forming part of the Profit and Loss Account (Contd.) 15 Months Ended 31st March, 2009 % Rs. lakhs 6
12 Months Ended 31st December, 2007 % Rs. lakhs
VALUE OF IMPORTED AND INDIGENOUS MATERIALS CONSUMED Raw materials - Imported - Indigenous Spare parts and components (including stores) - Imported - Indigenous
22 78
1456,19.39 5269,04.99
17 83
689,44.84 3445,26.12
8 92
10,03.44 110,52.58
28 72
24,56.77 62,94.83 Rs. lakhs
7
15 Months Ended 31st March, 2009
12 Months Ended 31st December, 2007
1442,12.46 46,03.16 30,62.11 1518,77.73
725,15.84 22,63.17 11,45.09 759,24.10
VALUE OF IMPORTS ON CIF BASIS (excluding purchases from canalising agencies and imported items purchased locally) Raw and packing materials Spare parts and components Capital goods
15 Months Ended 31st March, 2009 Tonnes Rs. lakhs 8
PURCHASE OF GOODS Processed triglycerides Soaps (Million nos.) Synthetic detergents Personal Products ('000 nos.) Frozen Desserts & Ice-creams (Million Ltrs.) Others (agri commodities, scourers, edible oils and fats, etc.) Total Less : Excise duty on purchases
9
2,098 309 4,37,065 1,05,07,919 7
14,53.71 371,59.22 1065,13.04 889,84.37 23,42.09 848,19.96 3212,72.39 (367,64.92) 2845,07.47
14,325 391 2,97,910 87,39,272 5
61,50.12 264,40.68 583,93.45 802,57.10 23,90.39 607,73.45 2344,05.19 (221,49.44) 2122,55.75 Rs. lakhs
15 Months Ended 31st March, 2009
12 Months Ended 31st December, 2007
1554,48.96 387,40.41 1941,89.37
1264,65.45 219,05.27 1483,70.72
24,27.58 130,92.68
9,04.20 55,06.28
175,13.42 145,14.87 475,48.55
49,25.18 81,98.55 195,34.21
EARNINGS IN FOREIGN EXCHANGE Exports at FOB (including exports to Nepal and Bhutan) Others (income from services, freight, insurance, claims, etc)
10
12 Months Ended 31st December, 2007 Tonnes Rs. lakhs
EXPENDITURE IN FOREIGN CURRENCY (on payment basis) (subject to deduction of tax where applicable) Consultancy Royalty Other matters: a) Imports of goods for resale b) Others
Financial Statements
Annual Report 2008-09
95
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Standalone
45"5&.&/54 forming part of the Profit and Loss Account (Contd.)
Rs. lakhs 15 Months Ended 31st March, 2009 11
NET DIVIDEND REMITTED IN FOREIGN CURRENCY 2006 Final to 7 shareholders on 1,13,48,49,460 shares of Re.1 each 2007 Interim to 7 shareholders on 1,13,48,49,460 shares of Re. 1 each 2007 Platinum Jubilee Dividend to 7 shareholders on 1,13,48,49,460 shares of Re. 1 each 2007 Final to 7 shareholders on 1,13,48,49,460 shares of Re. 1 each 2008 Interim to shareholders on 1,13,48,49,460 shares of Re. 1 each
12
13
12 Months Ended 31st December, 2007
340,45.48 340,45.48 340,45.48 340,45.48 397,19.73 737,65.21
1021,36.44
Previous year’s figures have been regrouped wherever necessary to conform to this year’s classification.
15 Months Ended 31st March, 2009
Rs. lakhs 12 Months Ended 31st December, 2007
6,27.38 6,07.43 35.00 47.72 24.69 13,42.22
4,26.86 4,51.83 25.00 43.00 32.40 9,79.09
DIRECTORS’ REMUNERATION Salaries Performance Linked Bonus / Commission to Wholetime Directors Commission to Non-Wholetime Directors Contribution to provident fund Other perquisites
Notes : 1) Provisions for contribution to employee retirement / post retirement and other employee benefits which are based on actuarial valuations done on an overall company basis are excluded above. 2) Remuneration of two directors Mr Dhaval Buch and Mr Gopal Vittal is subject to approval of shareholders in the forthcoming Annual General Meeting. 3) Performance bonus is for the year 2008, paid subsequent to period end.
96
Hindustan Unilever Limited
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45"5&.&/54 forming part of the Profit and Loss Account (Contd.) 13
DIRECTORS’ REMUNERATION (Contd. ) Computation of net profits in accordance with Section 198 of the Companies Act, 1956 and the commission payable to directors Rs. lakhs 15 Months Ended 31st March, 2009 Net Profit after taxation
12 Months Ended 31st December, 2007
2496,44.85
1925,46.98
Add : Depreciation (as per accounts) Directors' remuneration Directors' fees Provision / (write back) for doubtful debts and advances (net) Book deficit / (surplus) on fixed assets sold, scrapped, etc. (net)
195,30.42
138,35.90
13,42.22
9,79.09
14.00
10.80
25,29.70
(2,15.73)
9,27.41
(31,15.46)
(53,90.32)
(70,65.17)
Provision for diminution in value of investment/advances in subsidiaries
9,80.01
–
Provision / (write back) for diminution in value of investments and excess of cost over fair value of current investments (net), included in miscellaneous expenses
(3,08.70)
1,49.76
(18,86.13)
–
Loss / (Surplus) on disposal of investments (net)
Profit arising on disposal of a long-term investment Profit arising on disposal of brands Profit arising on disposal of land and building Dimunition of Goodwill arising on acquisition of business from a subsidiary
(1,50.48)
–
(167,63.01)
(100,85.27)
–
46.44
15,68.68
–
Profit arising on demerger of subsidiaries
–
(22,54.45)
Reversal of provision for impairment of sea food exports business assets
–
(5,71.83)
Profit on disposal of assets of business
–
(4,00.00)
Write-down of fixed assets for closed units
Cost in relation to buyback of shares Taxation for the year (after considering exceptional items)
–
6,00.00
504,07.09
402,33.08 528,00.89
321,47.16
3024,45.74
2246,94.14
Less : Depreciation under Section 350 Deficit / (Surplus) on disposal of fixed assets (net) under Section 349 Net profit for Section 198 of the Companies Act, 1956 Commission to Non-Wholetime Directors at 1 % Commission to wholetime directors Commission payable for the year
201,88.94
144,77.93
16,57.31
39,62.67 218,46.25
184,40.60
2805,99.49
2062,53.54
28,05.99
20,62.54
140,29.97
103,12.68
6,42.43
4,76.83
Financial Statements
Annual Report 2008-09
97
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/05&4
Standalone
to the Cash Flow Statement NOTES TO THE CASH FLOW STATEMENT FOR THE FIFTEEN MONTHS ENDED 31ST MARCH, 2009 1)
The cash flow statement has been prepared in accordance with the requirements of Accounting Standard - 3 “Cash Flow Statement” issued by the Institute of Chartered Accountants of India.
2)
During the year, the company demerged its Brookefields property to its subsidiary for a consideration of Rs. 12,93.60 lakhs received in the form of fully paid equity shares.
3)
In view of note 2 above and note 12 to the profit & loss account, the current years figures are not comparable with that of the previous years figure.
4)
Figures in brackets indicate Cash Outgo.
5)
The previous year’s figures have been regrouped / restated wherever necessary to conform to this period’s classification.
98
Hindustan Unilever Limited
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4&(.&/5 */'03."5*0/ for the 15 Months Ended 31st March, 2009 SEGMENT INFORMATION FOR THE 15 MONTHS ENDED 31ST MARCH, 2009 INFORMATION ABOUT PRIMARY BUSINESS SEGMENTS
Rs. lakhs 15 Months Ended 31st March, 2009 External REVENUE Soaps and Detergents Personal Products Beverages Foods Ice Creams Exports Other Operations Total Segment Eliminations Total Revenue (see note 3 to Segment Information) RESULT Soaps and Detergents Personal Products Beverages Foods Ice Creams Exports Other Operations Total Segment Total Consolidated Un-allocated expenditure net of un-allocated income Operating Profit Interest expenses Interest / dividend income and surplus on disposal of investments (net of provision / write back for dimunition in long term investments and mark down of current investment)
9880,55.65 5367,43.98 2294,46.24 810,70.26 235,14.33 1575,70.01 353,04.32 20517,04.79
Intersegment
7,92.50 7,92.50
12 Months Ended 31st December, 2007 Total
External
9880,55.65 5367,43.98 2294,46.24 810,70.26 235,14.33 1575,70.01 360,96.82 20524,97.29 (7,92.50)
6399,93.28 3686,59.61 1540,63.09 540,10.57 161,49.78 1348,96.51 178,16.23 13855,89.07
Intersegment
6,82.41 6,82.41
Total 6399,93.28 3686,59.61 1540,63.09 540,10.57 161,49.78 1348,96.51 184,98.64 13862,71.48 (6,82.41)
20517,04.79
13855,89.07
1481,72.83 1428,96.33 308,14.76 1,45.32 8,61.77 108,19.63 (134,46.89) 3202,63.75 3202,63.75 (360,84.02) 2841,79.73 (25,32.29) 208,64.27
978,69.50 1020,37.01 230,02.05 15,19.47 12,84.05 46,85.43 (87,04.00) 2216,93.51 2216,93.51 (281,47.68) 1935,45.83 (25,49.66) 236,36.77
Taxation for the year (including adjustments of previous years)
(524,41.15)
(403,20.98)
Profit after taxation and before exceptional / extra-ordinary items Exceptional items - income and expenditure (Segment) Soaps and Detergents Personal Products Beverages Foods Ice Creams Exports Other Operations
2500,70.57
1743,11.94
Exceptional items - income and expenditure (Unallocated/Corporate) Extra-ordinary item - income and expenditure (Segment) Foods Ice Creams Extra-ordinary item - income and expenditure (Unallocated/Corporate) Tax charge (net) One time reduction in tax liability arising from amalgamation of Modern Food Industries (India) Limited (a wholly owned subsidiary) with the company Net Profit
(84,76.79) (29,30.63) (32,63.11) (3,57.81) (1,05.02) (15,55.04) (1,60.67)
6,55.96 8,77.86 5,83.69 1,87.86 90.09 5,24.69 3,64.07 (168,49.08)
32,84.22
152,18.82
128,54.89
1,50.48 (46.44) (9,80.01)
20,54.45
20,34.06
(44,89.13)
–
45,77.03
2496,44.85
1925,46.96
Financial Statements
Annual Report 2008-09
99
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Standalone
4&(.&/5 */'03."5*0/ for the 15 Months Ended 31st March, 2009 (Contd.) SEGMENT INFORMATION FOR THE 15 MONTHS ENDED 31ST MARCH, 2009 INFORMATION ABOUT PRIMARY BUSINESS SEGMENTS
Rs. lakhs Segment Assets
Segment Liabilities
As at 31st March, 2009
As at 31st December, 2007
As at 31st March, 2009
As at 31st December, 2007
Soaps and Detergents Personal Products Beverages Foods Ice Creams Exports Other Operations Total
2535,80.18 1051,20.29 808,88.79 230,05.28 135,59.87 519,22.27 59,46.07 5340,22.75
1877,93.29 898,13.16 593,70.22 159,91.31 115,38.19 565,76.63 52,75.20 4263,58.00
(1942,31.46) (1028,26.00) (482,27.94) (186,02.73) (89,49.66) (198,23.00) (110,09.22) (4036,70.01)
(1751,69.40) (751,75.79) (540,21.88) (158,45.83) (77,73.80) (258,12.00) (77,28.36) (3615,27.06)
Unallocated Corporate Assets / (Liabilities)
3111,28.54
2566,48.83
(2353,30.56)
(1775,56.36)
Total Assets / (Liabilities)
8451,51.29
6830,06.83
(6390,00.57)
(5390,83.42)
OTHER INFORMATION
Rs. lakhs Capital Expenditure 15 Months 12 Months Ended Ended 31st March, 31st December, 2009 2007 Soaps and Detergents Personal Products Beverages Foods Ice Creams Exports Other Operations Unallocated Corporate Assets / (Liabilities)
100
168,46.99 82,66.48 29,12.06 35,78.72 16,61.78 27,68.74 14.35 248,88.61
Hindustan Unilever Limited
66,84.60 78,94.31 13,73.57 5,61.68 12,93.36 27,02.31 8.90 167,09.50
Non - Cash Expenses other than Depreciation
Depreciation 15 Months 12 Months Ended Ended 31st March, 31st December, 2009 2007 96,97.06 25,39.87 8,66.18 5,53.72 6,90.72 19,81.47 54.33 31,47.08
66,97.02 28,98.04 8,79.79 3,50.21 7,53.64 11,70.59 69.72 10,16.89
15 Months 12 Months Ended Ended 31st March, 31st December, 2009 2007 9,97.93 4,50.96 2,57.59 84.73 19.99 2,17.03 17.94 –
14,05.83 7,86.56 3,93.86 1,15.61 39.30 1,15.22 1,55.76 –
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4&(.&/5 */'03."5*0/ for the 15 Months Ended 31st March, 2009 (Contd.) SEGMENT INFORMATION FOR THE 15 MONTHS ENDED 31ST MARCH, 2009 INFORMATION ABOUT SECONDARY BUSINESS SEGMENTS
Rs. lakhs
Revenue by Geographical Market India Outside India Total Additions to Fixed Assets and Intangible Assets India Outside India Total Carrying Amount of Segment Assets India Outside India Total
15 Months Ended 31st March, 2009
12 Months Ended 31st December, 2007
18947,23.44 1569,81.35 20517,04.79
12352,88.53 1503,00.54 13855,89.07
360,49.12 – 360,49.12
205,18.73 – 205,18.73
5332,85.49 7,37.26 5340,22.75
4239,43.49 24,14.51 4263,58.00
Notes : 1. Business Segments The Company has considered business segment as the primary segment for disclosure. The products included in each of the reported domestic business segments are as follows: – Soaps and Detergents include soaps, detergent bars, detergent powders, detergent liquids, scourers, etc. – Personal Products include products in the categories of Oral Care, Skin Care (excluding soaps), Hair Care, Deodorants, Talcum Powder, Colour Cosmetics, Ayush services, etc. – Beverages include tea and coffee. – Foods include Branded Staples (Atta, Salt, Bread, etc.), Culinary Products (tomato based products, fruit based products, soups, etc.). – Ice Creams include Ice Creams and Frozen Desserts. – Others include Chemicals, Water business, etc. Segment Revenue relating to each of the above domestic business segments includes Income from Services provided, where applicable. In addition, the Company’s Exports business segment includes sales of Marine Products etc. as well as sales of Soaps and Detergents, Personal Products, Beverages and Foods, etc. by the Exports Division. The above business segments have been identified considering : a) the nature of products and services b) the differing risks and returns c) the organisation structure, and d) the internal financial reporting systems The Company has changed its accounting year from January - December to April - March with effect from the current year. Accordingly, the current year’s financial statements are for fifteen months from 1st January 2008 to 31st March 2009. The previous year’s figures relate to 12 months ended 31st December 2007. Hence the above figures are non comparable. 2.
Geographical Segments The geographical segments considered for disclosure are as follows : – Sales within India includes sales to customers located within India. – Sales outside India includes sales to customers located outside India.
3.
Revenue comprises Rs. lakhs Sales Income from services rendered (included in Other Income) Total
4.
2009
2007
20239,33.05 277,71.74 20517,04.79
13675,43.29 180,45.78 13855,89.07
Previous year’s figures have been regrouped wherever necessary to conform to this year’s classification.
Financial Statements
Annual Report 2008-09
101
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3&-"5&% 1"35: %*4$-0463&4 for the 15 Months Ended 31st March, 2009 RELATED PARTY DISCLOSURES A.
i)
Enterprises where control exists i)
Holding Company
: Unilever PLC
ii)
Subsidiaries
: Unilever India Exports Limited Bon Limited Unilever Nepal Limited Pond's Exports Limited Daverashola Estates Private Limited Jamnagar Properties Private Limited Shamnagar Estates Private Limited Hindustan Unilever Field Services Private Limited Brooke Bond Real Estates Private Limited Lakme Lever Private Limited (with effect from 19th December, 2008) Levers Associated Trust Limited Levindra Trust Limited Hindlever Trust Limited
B.
Other Related Parties with whom the company had transactions, etc. i)
Fellow Subsidiaries : Brooke Bond Assam Estates Limited Brooke Bond Group Limited Brooke Bond South India Estates Limited Lever Faberge UK Unilever U.K. Central Resources Limited Unilever Overseas Holdings Limited Unilever Australia Limited Lever Brothers Bangladesh Limited Unilever Canada Unilever Cote d'Ivoire Unilever Ghana Limited Unilever Kenya Limited Unilever New Zealand Limited Lever Brothers Pakistan Limited Unilever Singapore Pte Limited Unilever Foods Espana, S.A Division Frigo Unilever South Africa (Pty.) Limited Unilever Ceylon Limited Unilever Overseas Holdings AG Lever Brothers West Indies Limited Unilever Research Laboratory, Port Sunlight
102
Hindustan Unilever Limited
Fellow Subsidiaries : Unilever Research Laboratory, (contd.) Colworth House BB Kenya Group Unilever N.V. Unilever Overseas Holdings B.V. Unilever Brasil Limited Lever Chile S.A. Unilex Cameroon S.A. Unilever France S.A. Unilever International Paris Unilever Deutschland GmbH Lever Faberge Deutschland GmbH Unilever Hong Kong Limited BBL Japan K.K. Nippon Lever K.K. Sagit SPA, Italy Unilever Ethiopia Unilever Philippines (Prc), Inc. PT Unilever Indonesia TBK Unilever Thai Trading Limited Unilever Thai Holding Limited Unilever Sanayi ve Ticaret Turk A.S Unilever Home & Personal Care USA Lever Egypt SAE Lipton Division, Canada Lever Arabia Limited Lever Brothers Nigeria Limited Lipton Soft Drinks (Ireland) Lever Israel Elida P/S, Vietnam Unilever Polska Lever International Marine Supplies (LIMS) BV Unilever Gulf Free Zone Establishment, Arabia Unilever (China) Limited Unilever South Central Europe Unilever Baltic LLC Unilever Levant, Lebanon Unilever Tuketim Urunleri Sat Pazarlama Ticaret A.S. Unilever Best Foods, Vietnam Unilever SNG, Russia Unilever Taiwan Limited Unilever Ukraine Unilever Tuketim Mersin Serbest Bolge Subesi, Turkey Towells Lever LLC, Arabia Binzagr Lever Limited, Arabia Unilever Industries Private Limited Digital Securities Private Limited Lever Faberge France
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Standalone
3&-"5&% 1"35: %*4$-0463&4 for the 15 Months Ended 31st March, 2009 (Contd.) i)
Fellow Subsidiaries : Unilever Tanzania Limited (contd.) Unilever Cambodia Limited Lever Faberge Belgium
i)
Unilever Maghreb Export SA, Tunisia Unilever UK & CN Holdings, UK Lipton Limited UK Unilever (Malaysia) Holdings Sdn Berhad
Fellow Subsidiaries : Unilever Pakistan (contd.) Unilever Supply Chain Company Unilever Algerie Unilever Czech Republic Unilever De Argetina SA Unilever De Mexico De RL Unilever Espana SA Unilever Mashreq Int
Lever Ponds Division, Canada
Unilever Australia Export Pty. Limited
Europalma International Insurance services B.V.
Unilever Asia Pte. Limited Unilever South Korea
Lipton US Group Lever Faberge Italia SPA Unilever United States Inc.
Mashreq For Manufacturing Tea Limited, Egypt Unilever Hellas Elida Nepal Limited Lipton Tea Supply, Kenya Severn Gulf FZE
Hefei Lever Detergents Co. Limited, China Unilever Korea Unilever Vietnam Unilever Canada Foods Unilever Nigeria Lipton Limited (Head Office) / Lipton Tea Supply Limited
ii)
Joint Ventures
: Kimberly Clark Lever Private Limited
iii)
Associate
: Cap Gemini Business Services (India) Limited
iv)
Key Management Personnel
: Harish Manwani Douglas Baillie (upto 4th April 2008) D.Sundaram Leena Nair (from June 2007)
Unilever Market Development SA Bahrain Technical & Trading Co. W.L.L Unilever Bestfoods Benelux B.V. Netherlands Bestfoods Germany Bestfoods Nordic AS (Denmark) Unilever Bestfoods Ireland
Hemant Bakshi (from September 2008) Dhaval Buch Nitin Paranjpe Ashok Gupta (from June 2007) Shrijeet Mishra (from June 2007)
Frozen Fish International GmbH, Germany Unilever Uganda Limited Unilever Finland OY Unilever Sverige AB Unilever UK Food Manchester Unilever Iran P.J.S.C Unilever Magyarorszang KFT Commercial United for Import Unilever Germany GmBH - HPC Unilever Mozambique LDA Unilever Schweiz GmBH Unilever Trading LLC Elida Faberge Limited Unilever Market Limited Unilever Port Sunlight Fine Tea Egypt Unilever Japan
Ramamurthy Sridhar (from February 2009) Gopal Vittal (from July 2008) Sanjiv Kakkar (upto August 2008) S.Ravindranath (upto April 2007) S.Dube (upto June 2007) M.K.Sharma (upto May 2007) v)
Employees’ Benefit : Hind Lever Gratuity Fund Plans where there is The Union Provident Fund significant influence The Hind Lever Provident Fund The Hind Lever Pension Fund
Financial Statements
Annual Report 2008-09
103
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Standalone
3&-"5&% 1"35: %*4$-0463&4 for the 15 Months Ended 31st March, 2009 (Contd.) Disclosure of transactions between the Company and Related Parties and the status of outstanding balances as on 31st March, 2009 Rs. lakhs 15 Months Ended 31st March, 2009 516,62.44 116,17.17 267,72.77 42,75.70
12 Months Ended 31st December, 2007 715,32.61 75,62.87 164,41.35 34,07.07
33,76.47 13,38.96 1,03.34 63,47.22 14,94.74 2,69.90 54.00 1,26.82 1,40.71 15.00 13,61.35 16.16 16,57.00
16,61.89 24,46.42 1,10.58 – 12,64.78 2,37.07 54.00 2,10.58 – 12.00 24,48.42 – 16,57.00
56,70.31
59,07.80
14,55.00 10,30.00
15,50.00 16,89.99
: Sale of finished goods / raw materials etc. Sale of fixed assets Rent Received Income from services rendered Expenses shared by a fellow subsidiary Purchase of goods Dividend paid Royalty paid Revenue expenses in relation to purchase of Intangible Asset Purchase of Fixed Assets Purchase of Intangible Asset Advances and loans : Receivables Payables
983,25.30 – 1,37.50 8,61.46 7.50 257,44.56 221,02.78 2,20.01 4,46.01 1.16 38,72.66
778,03.19 18.64 1,10.00 8,48.22 6.00 119,14.37 306,03.83 1,56.59 – – –
110,15.62 61,54.39
197,27.99 7,84.27
225,34.21 2,91.88 5,98.13
136,81.90 2,04.50 4,35.00
i)
Holding Company
: Dividend paid Royalty paid Income from services rendered Outstanding balances : Receivables at the period end
ii)
Subsidiaries
: Sale of finished goods / raw materials etc. Sale of fixed assets Expenses shared by subsidiary companies Expenses for services received Dividend received Interest received Rent received Purchase of goods Purchase of DEPB License Rent paid Investment in equity shares Employee Loans transferred Deposits - Outstanding receivable at the period end Advances and loans : Outstanding at the period end Inter corporate deposits : Advanced during the period Repayments during the period
iii)
Fellow Subsidiaries
iv)
Joint Ventures
: Purchase of goods Other income Dividend received Advances and loans : Receivables
5,26.86
14.90
v)
Associate
: Expenses for services received Outstanding receivable at the period end
49,26.79 2,98.99
33,57.62 39.20
vi)
Key Management Personnel
: Remuneration Rent paid Dividend paid
20,42.26 25.50 11.62
15,56.47 9.55 11.96
vii)
Employees' Benefit Plans where there is significant influence
: Contributions during the period Outstanding payables at the period end Outstanding receivables at the period end
75,06.22 – 7,52.10
40,75.42 5,19.67 9,33.04
104
Hindustan Unilever Limited
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3&-"5&% 1"35: %*4$-0463&4 for the 15 Months Ended 31st March, 2009 (Contd.) Disclosure in respect of transactions which are more than 10% of the total transactions of the same type with related parties during the period. Rs. lakhs 15 Months Ended 31st March, 2009
12 Months Ended 31st December, 2007
252,52.45
251,20.89
12,93.60 – – –
– 5,00.00 15,00.00 4,46.42
1,03.34 –
84.08 26.50
14,94.74 5,98.13
12,64.78 4,35.00
Interest received Pond's Exports Limited Unilever India Exports Limited
1,84.21 82.52
1,55.26 81.81
Rent received Unilever Industries Private Limited Unilever India Exports Limited
1,37.50 54.00
1,10.00 54.00
Purchase of fixed assets Unilever Home & Personal Care USA
1.16
–
Purchase of goods Kimberly Clark Lever Private Limited Unilever Supply Chain Company Unilever Australia Limited Unilever Thai Holdings Limited
225,34.21 62,34.98 62,32.70 –
136,81.90 – – 41,33.38
15.00 7.50 – – 18.00
12.00 4.22 2.83 2.50 –
Investment in equity shares Brooke Bond Real Estates Private Limited Jamnagar Properties Private Limited Shamnagar Estates Private Limited Daverashola Estates Private Limited
12,93.60 – – –
– 5,00.00 15,00.00 4,46.42
Deposits outstanding receivable at the period end Unilever India Exports Limited
16,57.00
16,57.00
Inter corporate deposits advanced during the period Bon Limited Pond's Exports Limited
11,00.00 2,60.00
2,00.00 12,00.00
9,50.00
16,89.99
Sale of finished goods / raw materials etc. Unilever Gulf Free Zone Establishment, Arabia Sale of fixed assets Brooke Bond Real Estates Private Limited Jamnagar Properties Private Limited Shamnagar Estates Private Limited Daverashola Estates Private Limited Expenses shared by subsidiary companies / fellow subsidiary companies Pond's Exports Limited Unilever India Exports Limited Dividend received Unilever Nepal Limited Kimberly Clark Lever Private Limited
Rent paid Unilever India Exports Limited D.Sundaram S.Ravindranath M.K.Sharma Ashok Gupta
Inter corporate deposits repayments during the period Pond's Exports Limited
Financial Statements
Annual Report 2008-09
105
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Standalone
3&-"5&% 1"35: %*4$-0463&4 for the 15 Months Ended 31st March, 2009 (Contd.) Disclosure in respect of transactions which are more than 10% of the total transactions of the same type with related parties during the period. Rs. lakhs 15 Months Ended 31st March, 2009
12 Months Ended 31st December, 2007
2,91.88
2,04.50
Dividend paid Unilever PLC
516,62.44
715,32.61
Royalty paid Unilever PLC
116,17.17
75,62.87
Outstanding balances payables at the period end Unilever N.V. Unilever Supply Chain Company Lipton Limited UK Unilever Singapore Pte Limited The Union Provident Fund Lipton Limited (Head Office) / Lipton Tea Supply Limited
24,88.78 15,92.41 9,38.84 9,11.84 – –
1,46.15 – – – 5,19.67 4,63.46
Outstanding balances receivables at the period end Bon Limited Unilever PLC Unilever Gulf Free Zone Establishment, Arabia
46,43.70 42,75.70 –
41,39.74 34,07.07 55,37.91
267,72.77
164,41.35
49,26.79 63,47.22
33,57.62 –
Remuneration D.Sundaram Douglas Baillie Sanjiv Kakkar Nitin Paranjpe Dhaval Buch Gopal Vittal
3,47.28 – – 3,26.69 2,26.44 2,31.81
1,78.22 4,91.34 2,15.61 2,28.27 – –
Purchase of DEPB License Pond's Exports Limited
1,40.71
–
Revenue expenses in relation to purchase of Intangible Asset Unilever N.V.
4,46.01
–
27,87.21 10,85.44
– –
16.16
–
29,22.67 25,87.97 19,95.58 –
17,29.22 19,56.74 – 3,89.46
Other income Kimberly Clark Lever Private Limited
Income from services rendered Unilever PLC Expenses for services received Cap Gemini Business Services(India) Limited Hindustan Unilever Field Services Private Limited
Purchase of Intangible Asset Unilever Singapore Pte Limited Unilever N.V. Employee Loans transferred Hindustan Unilever Field Services Private Limited Contributions during the period The Union Provident Fund The Hind Lever Pension Fund Hind Lever Gratuity Fund The Hind Lever Provident Fund
106
Hindustan Unilever Limited
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Standalone
45"5&.&/5 16346"/5 50 1"35 *7 of the Companies Act, 1956 Statement Pursuant to Part IV of the Companies Act, 1956 Balance Sheet Abstract and Company’s General Business Profile
I
Registration Details Registration No.
1
1 – 2 0 3 0
State Code Balance Sheet Date
II
1 1 3 1 Date
0 3 Month
2 0 0 9 Year
Capital raised during the year (Amount in Rs. thousands) Public Issue
N
I
L
Rights Issue
Bonus Issue
N
I
L
Private Placement
N
I
L 2 4 1 3
III Position of Mobilisation and Deployment of Funds (Amount in Rs. thousands) Total Liabilities
8 4 5 1 5 1 2 9
Total Assets
8 4 5 1 5 1 2 9
1 8 4 3 5 1 9 6
Sources of Funds Paid - up Capital
2 1 7 9 8 7 6
Reserves and Surplus
Secured Loans
1 4 4 6 4 9 3
Unsecured Loans
2 7 7 2 9 7 8
Application of Funds Net Fixed Assets
2 0 7 8 8 5 0 4
Investments
3 3 2 6 2 0 2
Net Current Assets
– 1 8 2 8 4 7 5
Deferred Tax
2 5 4 8 3 1 2
Miscellaneous Expenditure
N
I
L
Accumulated Losses
N
I
L
IV Performance of Company (Amount in Rs. thousands) Turnover (Total Income) Profit/(Loss) Before Tax and Exceptional Items Earning per Share (in Rs.)
2
0 8 0 7 1 1 7 5
Total Expenditure
3 0 2 5 1 1 7 2
Profit/(Loss) After Tax and Exceptional Items
1 1
.
4 6
– 1 7 7 8 2 0 0 0 3 2 4 9 6 4 4 8 5
Dividend Rate (%)
7 5 0
V Generic Names of three Principal Products / Services of the Company (As per Monetary Terms) Item Code No. (ITC Code)
3 4
.
0 1
Product Description
S O A P
Item Code No. (ITC Code)
3 4
.
0 2
Product Description
D E T E R G E N T S
Item Code No. (ITC Code)
0 9
.
0 2
Product Description
T E A
Financial Statements
Annual Report 2008-09
107
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Standalone
"6%*5034’ 3&1035 to the Members of Hindustan Unilever Limited 1.
We have audited the attached Balance Sheet of Hindustan Unilever Limited as at 31st March, 2009 and the related Profit and Loss Account and Cash Flow Statement for the period from 1st January, 2008 to 31st March, 2009 annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
2.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3.
As required by the Companies (Auditor’s Report) Order, 2003 as amended by Companies (Auditor’s Report) (Amendment) Order, 2004 (together ‘the Order’), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of ‘The Companies Act, 1956’ of India (the ‘Act’) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4.
Further to our comments in the Annexure referred to in paragraph 3 above, we report that: a)
We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;
b)
In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
c)
The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;
d)
In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;
e)
On the basis of written representations received from the directors, as on 31st March, 2009, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;
f)
In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India: i)
in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2009;
ii)
in the case of the Profit and Loss Account, of the profit for the period ended on that date; and
iii)
in the case of the Cash Flow Statement, of the cash flows for the period ended on that date. Sharmila A. Karve Partner Membership No: 43229 For and on behalf of Lovelock & Lewes Chartered Accountants
Mumbai, 10th May, 2009
108
Hindustan Unilever Limited
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"6%*5034’ 3&1035 ANNEXURE ANNEXURE TO THE AUDITORS’ REPORT
[Referred to in paragraph 3 of the Auditors’ Report of even date to the members of Hindustan Unilever Limited on the financial statements for the period ended 31st March, 2009] 1.
(a)
The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.
(b)
Fixed assets are physically verified by the management according to a phased programme designed to cover all the locations once in two years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, fixed assets at certain locations were physically verified by the management during the period and no material discrepancies between the book records and the physical inventory have been noticed.
(c)
2.
(a)
In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the period. Inventory (excluding stocks with third parties) has been physically verified by the management during the period. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.
(b)
In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.
(c)
On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
3.
The Company has neither granted nor taken any loans, secured or unsecured, to/ from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Consequently, clauses (iii)(b), (iii)(c), (iii)(d), (iii)(f) and (iii)(g) of paragraph 4 of the Order are not applicable.
4.
In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company carried out in accordance with the auditing standards generally accepted in India and according to the information and explanations given to us, we have neither come
across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system. 5.
(a)
In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.
(b)
In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of such contracts or arrangements and exceeding Rs. five lakhs in respect of any party during the period, which have been made at prices which are not reasonable having regard to the prevailing market prices at the relevant time.
6.
In our opinion and according to the information and explanations given to us, no fixed deposits were outstanding or accepted during the period to which the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 apply.
7.
In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.
8.
We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
9.
(a)
According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees’ state insurance, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities.
(b)
According to the information and explanations given to us and the records of the Company examined by us, there are no dues of wealth tax and cess which have not been deposited on account of any dispute. The particulars of excise duty, sales tax, customs duty, income-tax and service tax as at 31st March, 2009 which have not been deposited on account of a dispute are as follows:
Financial Statements
Annual Report 2008-09
109
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Standalone
"6%*5034’ 3&1035 ANNEXURE (Contd.) Name of the statute
Nature of dues
The Central Excise Act, 1944
Excise duty including interest and penalty, as applicable
Central Sales Tax Act and Local Sales Tax Acts (including works contract)
Sales tax including interest and penalty, as applicable
Customs Act, 1962
Customs duty including interest and penalty, as applicable Income tax including interest and penalty, as applicable
Income-tax Act, 1961
Service Tax
Amount under dispute not yet deposited Rs. Lakhs 56,51.40
Service tax including interest and penalty, as applicable
Periods to which the amount relates
1982,1987 1991 to 1995 1997 to 2006 44,59.71 1983 to 1986 1989 to 1991 1994 to 2006 25.53 1979 to 1983 93,34.02 1976, 1977 1983 to 2008 15,16.98 1984 to 2004 95,21.62 1983 to 2001 56.27 1995
4,38.79
1979-80 1995-96 1,07.60 1985-86 1991-92 31.55 1988-89 84.45 2004 to 2006
Forum where the dispute is pending Appellate Authority – upto Commissioner’s level Tribunal
Supreme Court Appellate Authority – upto Commissioner’s level Tribunal High Courts Appellate Authority – upto Commissioner’s level Appellate Authority – upto Commissioner’s level Tribunal High Courts Appellate Authority – upto Commissioner’s level
10. The Company has no accumulated losses as at 31st March, 2009
Company, in our opinion and according to the information and
and has not incurred any cash losses in the period ended on that
explanations given to us, there are no funds raised on a short-term
date or in the immediately preceding financial year.
basis which have been used for long-term investment.
11. According to the records of the Company examined by us and the
18. The Company has not made any preferential allotment of shares
information and explanations given to us, the Company has not
to parties and companies covered in the register maintained under
defaulted in repayment of dues to any financial institution or bank
Section 301 of the Act during the period.
or debenture holders as at the balance sheet date. 12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
19. The Company has not issued any debentures during the period. 20. The Company has not raised any money by public issue during the period. 21. During the course of our examination of the books and records of
13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company.
the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and
14. In our opinion and according to the information and explanations
explanations given to us, we have neither come across any instance
given to us, the Company is not a dealer or trader in shares,
of material fraud on or by the Company, noticed or reported
securities, debentures and other investments.
during the period, nor have we been informed of such case by the
15. In our opinion and according to the information and explanations given
management.
to us, the Company has not given any guarantee for loans taken by
Sharmila A. Karve
others from banks or financial institutions during the period.
Partner Membership No: 43229
16. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied
For and on behalf of
for the purposes for which they were obtained. The unutilised
Lovelock & Lewes
monies are lying with bank for further utilisation. 17. On the basis of an overall examination of the balance sheet of the
110
Hindustan Unilever Limited
Chartered Accountants Mumbai, 10th May, 2009
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&$0/0.*$ 7"-6& "%%&% ADDITIONAL INFORMATION : ECONOMIC VALUE ADDED (EVA) What is EVA? *Traditional approaches to measuring ‘Shareholder’s Value Creation’ have used parameters such as earnings capitalisation, market capitalisation and present value of estimated future cash flows. Extensive equity research has now established that it is not earnings per se, but VALUE that is important. A new measure called ‘Economic Value Added’ (EVA) is increasingly being applied to understand and evaluate financial performance. * EVA = Net Operating Profit after Taxes (NOPAT) – Cost of Capital Employed (COCE), where, NOPAT = Profits after depreciation and taxes but before interest costs. NOPAT thus represents the total pool of profits available on an ungeared basis to provide a return to lenders and shareholders, and COCE = Weighted Average Cost of Capital (WACC) x Average Capital Employed * Cost of debt is taken at the effective rate of interest applicable to an “AAA” rated company like HUL with an appropriate mix of short, medium and long term debt, net of taxes. We have considered a pre tax rate of 5.92% for 2008-09 (9.45% for 2007) after taking into account the trends over the years and market situations. * Cost of Equity is the return expected by the investors to compensate them for the variability in returns caused by fluctuating earnings and share prices. Cost of Equity = Risk free return equivalent to yield on long term Government Bonds (taken at 7.62% for 2008-09) (+) Market risk premium (taken at 11%) (x) Beta variant for the Company, (taken at 0.623) where Beta is a relative measure of risk associated with the Company’s shares as against the market as a whole. Thus HUL’s cost of equity = 7.62% + 11% (x) 0.623 = 14.47% What does EVA show? EVA is residual income after charging the Company for the cost of capital provided by lenders and shareholders. It represents the value added to the shareholders by generating operating profits in excess of the cost of capital employed in the business. When will EVA increase? EVA will increase if: a. Operating profits can be made to grow without employing more capital, i.e. greater efficiency. b. Additional capital is invested in projects that return more than the cost of obtaining new capital, i.e. profitable growth. c. Capital is curtailed in activities that do not cover the cost of capital, i.e. liquidate unproductive capital. EVA in practice at Hindustan Unilever Ltd. In Hindustan Unilever, the goal of sustainable long term value creation for our shareholders is well understood by all the business groups. Measures to evaluate business performance and to set targets take into account this concept of value creation. EVA TRENDS: 1999-2009 (UNAUDITED) Cost of Capital Employed (COCE) 1 Average Debt 2 Average Equity 3 Average Capital Employed : (1) + (2) 4 Cost of Debt, post-tax % 5 Cost of Equity % 6 Weighted Average Cost of Capital % (WACC) 7 COCE : (3) x (6) Economic Value Added (EVA) 8 Profit after tax, before exceptional items 9 Add : Interest, after taxes 10 Net Operating Profits After Taxes (NOPAT) 11 COCE, as per (7) above 12 EVA : (10) - (11) * COCE is computed for 15 months
Rs. crores
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008-09
162 1908 2070 8.61 19.70 18.83 390
93 2296 2389 8.46 19.70 19.27 460
50 2766 2816 7.72 16.70 16.54 466
45 3351 3396 6.45 14.40 14.30 486
881 2899 3780 4.88 12.95 11.07 418
1588 2116 3704 5.19 14.77 10.66 395
360 2200 2560 3.38 15.50 13.80 353
163 2515 2678 5.90 16.38 15.74 421
382 2402 2784 6.24 17.59 16.03 446
342 1928 2270 3.91 14.47 12.88 *365
1070 14 1084 390 694
1310 8 1318 460 858
1541 5 1546 466 1080
1716 6 1722 486 1236
1804 43 1847 418 1429
1199 82 1281 395 886
1355 12 1367 353 1014
1540 7 1547 421 1126
1,743 17 1760 446 1314
2444 17 2461 365 2097
Economics Value Added (EVA) (Rs. crores)
2,400
2097
2,000 1,600
1429 1080 886
858 800
1314
1236
1,200
1014
1126
694
400 0
1999
2000
2001
2002
2003
2004
2005
2006
2007
Financial Statements Economic Value Added
2008-09
Annual Report 2008-09
111
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Consolidated
4*(/*'*$"/5 "$$06/5*/( 10-*$*&4 Basis for preparation of accounts
is being amortised over the period of the lease) on the Straight Line
The accounts have been prepared to comply in all material aspects with
Method (SLM) and at the rates and in the manner specified in Schedule
applicable accounting principles in India and the Applicable Accounting
XIV of the Companies Act, 1956. However,
Standards notified u/s 211 (3C) of the Companies Act, 1956.
-
certain employee perquisite-related assets are depreciated over four to
Sales are recognised when goods are supplied and are recorded net
-
computers and related assets are depreciated over four years
of trade discounts, rebates, sales taxes and excise duties (on goods
-
certain assets of the cold chain are depreciated over four / seven
incentives such as duty drawbacks and premiums on sale of import
-
motor vehicles are depreciated over six years and
licences. It does not include inter-divisional transfers.
-
assets of certain subsidiaries are depreciated on the Written Down
six years, the period of the perquisite scheme
Revenue Recognition
years
manufactured and outsourced) but include, where applicable, export
Income from Property Development Activity is recognised in terms of arrangements with developers, where applicable. Incomes from services rendered are booked based on agreements/ arrangements with the concerned parties.
Value Method (WDV). The difference between the SLM basis and WDV basis is not significant. Assets identified and evaluated technically as obsolete and held for disposal are stated at their estimated net realisable values.
Interest on investments are booked on a time proportion basis taking
Investments
into account the amounts invested and the rate of interest.
Investments are classified into current and long-term investments. Current
Dividend incomes on investments are accounted for when the right to receive the payment is established. Expenditure
investments, other than in Associates, are stated at cost. A provision for diminution is made to recognise a decline, other than temporary, in the value of long-term investments. Investments in Associates are accounted
Expenses are accounted for on accrual basis and provision is made for all known losses and liabilities. Advertising expenses are charged against the profit of the year to which the activities relate. Revenue expenditure on research and development is charged against the profit of the year in which it is incurred. Capital expenditure on research and development is shown as an addition to fixed assets. Goodwill and other Intangible Assets Intangible assets are stated at cost of acquisition less accumulated amortisation. Goodwill and other intangible assets (except computer software) are amortised over the assets useful life not exceeding 10 years. Computer software is amortised over a period of 5 years on the straight line method. Goodwill arising on consolidation in accordance with AS-21 is amortised over 4 years at quarterly rests commencing from the quarter of recognition of goodwill. Impairment of Assets Impairment loss, if any, is provided to the extent, the carrying amount of assets exceeds their recoverable amount. Recoverable amount is higher of an asset’s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.
for using the equity method. Interests in Joint Ventures Interests in Jointly controlled entities (Incorporated Joint Ventures) are accounted for using proportionate consolidation method. Inventories Inventories are valued at the lower of cost, computed on a weighted average basis, and estimated net realisable value, after providing for cost of obsolescence and other anticipated losses, wherever considered necessary. Finished goods and work-in-progress include costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Sundry Debtors and Loans and Advances Sundry debtors and Loans and Advances are stated after making adequate provisions for doubtful balances. Provisions A provision is recognised when there is a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made. Provision is not discounted to its present value and is determined based on the best estimate required to settle the obligation at the year end date. These are reviewed at each year end date and adjusted to
Fixed Assets
reflect the best current estimate.
Fixed assets are stated at cost less depreciation. Depreciation is provided (except in the case of leasehold land which
112
investments are stated at the lower of cost and fair value. Long-term
Hindustan Unilever Limited
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Consolidated
4*(/*'*$"/5 "$$06/5*/( 10-*$*&4 Retirement / Post Retirement Benefits
Foreign Currency Translations
Contributions to Defined Contribution schemes such as Provident Fund,
Foreign currency transactions are accounted at the exchange rates
etc. are charged to the Profit and Loss account as incurred. In respect
prevailing at the date of the transaction. Gains and losses resulting from
of certain employees, Provident Fund contributions are made to a Trust
the settlement of such transactions and from the translation of monetary
administered by the Company. The interest rate payable to the members
assets and liabilities denominated in foreign currencies are recognised
of the Trust shall not be lower than the statutory rate of interest declared
in the profit and loss account.
by the Central Government under the Employees Provident Funds and
Forward exchange contracts outstanding as at the period end on
Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made
account of firm commitment/highly probable forecast transactions are
good by the Company. The remaining contributions are made to a
marked to market and the resultant gain/loss is dealt in the profit and
government administered Provident Fund towards which the Company
loss account.
has no further obligations beyond its monthly contributions. The Company also provides for retirement / post-retirement benefits in the form of gratuity, pensions, leave encashment and medical. Such benefits are provided for based on valuations, as at the balance sheet date, made by independent actuaries. Termination benefits are recognised as an expense as and when incurred. Taxes on Income
Segment Reporting The accounting policies adopted for segment reporting are in line with the accounting policies adopted in consolidated financial statements with the following additional policies being considered for segment reporting: a)
Current tax is determined as the amount of tax payable in respect of
market led.
taxable income for the period. Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognised on unabsorbed depreciation and carry forward
Inter segment revenue has been accounted for based on the transaction price agreed to between segments which is primarily
b)
Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under ‘Unallocated corporate expenses’.
of losses unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.
Financial Statements
Annual Report 2008-09
113
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Consolidated
130'*5 "/% -044 "$$06/5 for the 15 months ended 31st March, 2009
Figures in brackets represent deductions Rs. lakhs Notes INCOME Sales Other income Total EXPENDITURE Operating expenses Depreciation Interest Total PROFIT BEFORE TAXATION & EXCEPTIONAL / EXTRAORDINARY ITEMS Taxation for the year - current tax - deferred tax - fringe benefit tax Taxation adjustment of previous years (net) PROFIT AFTER TAXATION, BEFORE EXCEPTIONAL / EXTRAORDINARY ITEMS Exceptional/Extraordinary items (net of tax) PROFIT BEFORE MINORITY INTERESTS Minority Interests NET PROFIT Balance brought forward Loss of an erstwhile subsidiary transferred to General Reserve on amalgamation Available for distribution Dividends : On equity shares: Interim - Rs. 3.50 per share - declared on 25th July, 2008 (includes Rs. 13.84 lakhs on Final Dividend for 2007) Platinum Jubilee - Rs. 3.00 per share - declared on 31st October, 2007 Final - Rs. 4.00 per share - proposed Tax on distributed profits (includes Rs. 2.35 lakhs on final dividend for 2007) Transfer to General Reserve Balance carried forward Earnings Per Share (Rs. ) - Basic (Face value of Re.1 each) - Dilutive (Face value of Re.1 each) For notes, statements, additional information, segment information, related party disclosures and accounting policies See pages: 112, 113, 118 to 121 and 141 to 147
15 months ended 31st March, 2009
12 months ended 31st December, 2007
20501,10.25 558,12.47 21059,22.72
13871,08.20 422,26.41 14293,34.61
(17798,19.66) (199,97.50) (26,44.79) (18024,61.95) 3034,60.77 (544,63.51) (4,73.88) (38,18.37) 48,35.25 2495,40.26 14,52.99 2509,93.25 (5,42.74) 2504,50.51 176,92.44 – 2681,42.95
(11974,17.11) (141,90.59) (26,48.58) (12142,56.28) 2150,78.33 (334,21.70) (39,65.18) (40,22.93) 5,04.94 1741,73.46 177,13.70 1918,87.16 (3,98.19) 1914,88.97 640,27.44 153,99.05 2709,15.46
(762,55.93)
(662,30.35)
– (871,95.04) (278,80.15) (250,00.00) 518,11.83 11.50 11.47
(660,57.83) (653,23.90) (356,10.94) (200,00.00) 176,92.44 8.69 8.66
1 2
3-5 6
18 11
15
Signatures to pages : 112 to 114, 118 to 121 and 141 to 147
In terms of our report of even date Sharmila A. Karve Partner Membership No. 43229 For and on behalf of LOVELOCK & LEWES Chartered Accountants
Nitin Paranjpe D. Sundaram Ashok Gupta
Mumbai : 10th May 2009
Mumbai : 10th May 2009
114
Hindustan Unilever Limited
Vivek Subramanian D. S. Parekh
Managing Director and CEO Vice Chairman and CFO Executive Director - Legal and Company Secretary Group Corporate Accountant Chairman, Audit Committee
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Consolidated
#"-"/$& 4)&&5 as at 31st March, 2009
Figures in brackets represent deductions Rs. lakhs Schedule SOURCES OF FUNDS Shareholders’ funds Capital Reserves and surplus Minority Interests Loan funds Secured loans Unsecured loans
1 2
As at 31st March, 2009
217,98.76 1919,48.45
As at 31st December, 2007
217,74.63 1290,41.26 2137,47.21 7,78.24
3 4
156,28.72 277,84.66
1508,15.89 5,49.68 38,86.28 63,28.69
434,13.38 2579,38.83
102,14.97 1615,80.54
APPLICATION OF FUNDS Fixed assets Gross block Depreciation and impairment loss Net block Capital work-in-progress Investments Deferred Tax Deferred Tax Assets Deferred Tax Liabilities Current assets, loans and advances Inventories Sundry debtors Cash and bank balances Other current assets Loans and advances
7 8
443,69.09 (190,64.83)
9 10 11 12 13
2580,52.60 560,56.07 1864,11.67 19,70.41 761,87.32 5786,78.07
2003,77.42 464,93.06 262,42.19 18,52.47 669,92.65 3419,57.79
Current liabilities and provisions Liabilities Provisions
14 15
(4332,45.51) (1551,48.08) (5883,93.59)
(3897,67.27) (1297,36.29) (5195,03.56)
5
2959,13.81 (1301,15.21) 1657,98.60 477,87.04
6
Net current assets
For schedules, contingent liabilities, additional information, segment information, related party disclosures and accounting policies See pages : 122 to 139 and 141 to 147
2135,85.64 287,64.45
253,04.26
2727,26.06 (1168,36.06) 1558,90.00 188,82.11
409,60.61 (195,25.25)
(97,15.52) 2579,38.83
1747,72.11 1429,18.84
214,35.36
(1775,45.77) 1615,80.54
Signatures to pages : 115, 122 to 139 and 141 to 147
In terms of our report of even date Sharmila A. Karve Partner Membership No. 43229 For and on behalf of LOVELOCK & LEWES Chartered Accountants
Nitin Paranjpe D. Sundaram Ashok Gupta
Mumbai : 10th May 2009
Mumbai : 10th May 2009
Vivek Subramanian D. S. Parekh
Financial Statements
Managing Director and CEO Vice Chairman and CFO Executive Director - Legal and Company Secretary Group Corporate Accountant Chairman, Audit Committee
Annual Report 2008-09
115
Back to 'What's Inside'
Consolidated
$"4) '-08 45"5&.&/5 for the 15 months ended 31st March, 2009
Rs. lakhs 12 months ended 31st December, 2007
15 months ended 31st March, 2009 A
CASH FLOW FROM OPERATING ACTIVITIES : Profit before taxation and exceptional items
3034,60.77
2150,78.33
Adjustments for : Depreciation
199,97.50
141,90.59
Surplus on disposal of investments (net)
(53,91.14)
(70,67.05)
(3,08.70)
1,49.68
Provision / (reversal of provision) for diminution in value of investments and excess of cost over fair value of current investments (net) Deficit / (surplus) on disposal of fixed assets (net)
9,27.83
7,32.11
Interest income
(84,32.01)
(65,99.66)
Dividend income
(51,42.99)
(87,35.42)
26,44.79
26,48.58
Interest expenditure Operating Profit before Working Capital Changes
42,95.28
(46,81.17)
3077,56.05
2103,97.16
Adjustments for : Trade and Other Receivables
(164,85.86)
(27,62.00)
Inventories
(576,75.18)
(399,40.49)
Trade Payables and Other Liabilities
425,49.45
577,92.44 (316,11.59)
150,89.95
Cash generated from operations
2761,44.46
2254,87.11
Taxes paid (including fringe benefit tax) (net of refunds)
(648,47.68)
(500,41.73)
Cash flow before exceptional / extraordinary items
2112,96.78
1754,45.38
Compensation paid under Voluntary Separation Schemes and amount paid for an industrial dispute relating to a closed factory.
(39,75.95)
(15,79.96)
Transitional cost due to consolidation of offices / factories
(16,41.34)
(19,56.88)
–
13,00.00
(4,23.77)
–
Exceptional :
Consideration received on sale of a business Amounts paid for other restructuring activities Extraordinary : Consideration received on disposal of a brand Net Cash from Operating Activities.....................................A B
1,50.48
–
2054,06.20
1732,08.54
CASH FLOW FROM INVESTING ACTIVITIES : Purchase of fixed assets Sale of fixed assets Purchase of investments Sale of investments
(645,84.04)
(334,56.13)
6,24.05
47,14.13
(12488,62.97)
(14255,55.16)
13682,45.54
15247,86.56
Interest received
83,14.07
59,22.72
Dividend received
51,42.99
Cash flow before exceptional items / extraordinary items
116
Hindustan Unilever Limited
87,35.42 688,79.64
851,47.54
Back to 'What's Inside'
Consolidated
$"4) '-08 45"5&.&/5 for the 15 months ended 31st March, 2009 (Contd.)
Rs. lakhs 12 months ended 31st December, 2007
15 months ended 31st March, 2009 Exceptional : Consideration received on disposal of unused land and building (including residential properties) Consideration received on disposal of long term investment Net Cash from Investing Activities.........................................B C
176,18.50
149,48.53
20,38.33
–
885,36.47
1000,96.07
CASH FLOW FROM FINANCING ACTIVITIES : Dividends paid Tax on distributed profits Interest paid
(1439,75.60)
(1957,57.17)
(241,63.15)
(337,99.73)
(26,44.79)
(26,44.28)
Buyback of equity shares
–
(626,27.25)
Cost in relation to buyback of equity shares
–
(5,26.54)
Bank overdrafts (net) Proceeds from borrowings
(37,71.36)
9,60.44
1281,44.76
665,02.52
Proceeds from share allotment under Employee Stock option scheme Repayments of borrowings
38,11.94
12,36.30
(911,74.99)
(664,96.74)
Net Cash used in Financing Activities....................................C Net Increase / (Decrease) in Cash and Cash equivalents.....(A+B+C) Cash and Cash equivalents as at 1st January (Opening Balance) Cash and Cash equivalents as at Period end (Closing Balance)
For Notes See page : 140
(1337,73.19)
(2931,52.45)
1601,69.48
(198,47.84)
262,42.19
460,90.03
1864,11.67
262,42.19
Signatures to pages : 116, 117 and 140
In terms of our report of even date Sharmila A. Karve Partner Membership No. 43229 For and on behalf of LOVELOCK & LEWES Chartered Accountants
Nitin Paranjpe D. Sundaram Ashok Gupta
Mumbai : 10th May 2009
Mumbai : 10th May 2009
Vivek Subramanian D. S. Parekh
Financial Statements
Managing Director and CEO Vice Chairman and CFO Executive Director - Legal and Company Secretary Group Corporate Accountant Chairman, Audit Committee
Annual Report 2008-09
117
Back to 'What's Inside'
Consolidated
/05&4 to the Profit and Loss Account
Rs. lakhs
INCOME 1 Sales Less: Excise duty Share of Joint Ventures - Schedule 20 (b)
2
Sales include duty drawback and licence premium on exports Other income Income from services rendered Interest income - bank and other accounts (gross) Interest income - non trade (gross) (Note 7) Dividend income - trade - long term (gross) Dividend income - non trade - long term (gross) Dividend income - non trade - current (gross) Surplus on disposal of current investments (net) Miscellaneous income (Note 8 ii) Share of Joint Ventures - schedule 20 (b)
OPERATING EXPENSES 3 Materials consumed and Purchase of goods Raw materials consumed Packing materials consumed Purchase of goods 4 General expenditure Salaries, wages, bonus, etc. Contribution to provident and other funds Workmen and staff welfare expenses Processing charges Consumption of stores and spare parts Repairs and maintenance - Buildings - Plant - Others Power, light, fuel and water Rent Rates and taxes Insurance Advertising and sales promotion Carriage and freight Agents' commission and brokerage Provision / (write back) for doubtful debts and advances (net) Travelling and motor car expenses Deficit on fixed assets sold, scrapped, etc. (net) Miscellaneous expenses (Note 10)
118
Hindustan Unilever Limited
15 months ended 31st March, 2009
12 months ended 31st December, 2007
21810,12.95 (1410,91.95) 20399,21.00 101,89.25 20501,10.25 43,14.70
14841,67.87 (1040,97.49) 13800,70.38 70,37.82 13871,08.20 24,25.71
281,64.06 61,59.17 18,47.95 5,75.15 1,64.52 44,03.32 53,91.14 85,30.12 552,35.43 5,77.04 558,12.47
184,11.05 40,93.98 21,39.19 5,65.32 1,36.71 80,33.39 70,67.05 14,06.38 418,53.07 3,73.34 422,26.41
6884,43.18 1715,31.08 2714,82.24
4224,92.61 1171,10.10 2055,98.51
1043,44.26 73,99.11 71,54.18 228,29.30 121,14.76 13,74.81 88,10.08 10,46.62 304,47.15 175,39.06 81,05.47 5,17.98 2153,81.99 1145,11.52 11,27.29 16,05.20 209,97.34 9,27.83 1042,02.46
676,42.48 51,76.51 53,29.41 150,39.47 88,34.55 9,35.49 68,74.92 12,07.44 201,45.85 122,43.24 48,03.34 7,39.56 1454,28.56 736,92.29 7,06.99 (90.60) 152,60.75 7,32.11 748,95.90
Back to 'What's Inside'
Consolidated
/05&4 to the Profit and Loss Account (Contd.)
Rs. lakhs
5
15 months ended 31st March, 2009
12 months ended 31st December, 2007
43,05.59 11.72 818,23.71
36,31.76 84.62 669,57.87
(189,49.63) (1,75.15) (1105,10.72) 12,90.68 17696,89.11 101,30.55 17798,19.66
(43,05.59) (11.72) (818,23.71) 17,56.74 11910,89.45 63,27.66 11974,17.11
Stocks Opening stocks : - Work-in-progress - Processed chemicals - Finished goods Closing stocks : - Work-in-progress (Note 14) - Processed chemicals - Finished goods Excise Duty on Increase/ (Decrease) of Finished goods Share of Joint Ventures - schedule 20 (b)
6
Interest paid on bank and other accounts Rs. 26,44.79 lakhs (2007 - Rs. 26,48.58 lakhs), including on fixed period loan Rs. 1,00.68 lakhs (2007 - Rs. Nil).
7
Interest received - non trade (gross) comprises of Rs. 17,10.76 lakhs (2007 - Rs. 18,09.94 lakhs) and Rs. 1,37.19 lakhs (2007 - Rs. 3,29.25 lakhs) in respect of long term and current investments respectively.
8
i)
The net difference in foreign exchange (i.e. the difference between the spot rates on the dates of the transactions and the actual rates at which the transactions are settled/appropriate rates applicable at the year end) credited to the Profit and Loss Account is Rs. 32,30.70 lakhs (2007 - credit of Rs. 18,83.47 lakhs).
ii)
The above includes gain of Rs. 60,00.18 lakhs (2007 - loss of Rs. 8,77.02 lakhs) booked under Miscellaneous income on account of mark to market valuation of open forward contracts and monetary items (viz. foreign currency receivables and payables) in line with AS - 11.
9
Operating expenses include research and development expenses of Rs. 74,46.61 lakhs (2007 Rs. 49,38.63 lakhs).
10
Miscellaneous expenses i)
include credit in respect of excess of cost over fair value of current investments (net) Rs. 3,08.70 lakhs (2007 - Charge Rs. 1,49.76 lakhs (net)). Rs. lakhs
11
15 months ended 31st March, 2009
12 months ended 31st December, 2007
–
62,98.06
170,66.70
146,44.60
– 3,22.65 15,66.67 189,56.02
5,71.83 – – 215,14.49
(70,90.83)
(18,11.90)
(19,05.11) (15,68.67) (6,12.47)
(25,23.88) – –
Exceptional Items/Extraordinary items A) Exceptional Items i) Reduction in liability for retirement arising from impact of revised interest rates and lower annuity costs ii)
Profit arising from disposal of unused land and building (including residential properties)
iii) iv) v)
Reversal of Provision for impairment of sea food export business assets Reversal of Provision on account of settlement of Legal cases Profit arising out of disposal of a long term investment Total exceptional income Restructuring costs across businesses comprising a) Compensation under Voluntary Separation Schemes and amount payable in an industrial dispute relating to a closed factory
vi)
b) c) d)
Transitional cost due to consolidation of offices / factories Write-down of fixed assets for closed units Other Costs
Financial Statements
Annual Report 2008-09
119
Back to 'What's Inside'
Consolidated
/05&4 to the Profit and Loss Account (Contd.)
Rs. lakhs
11
Exceptional Items/Extraordinary items (contd.) A) Exceptional Items vii) Provision for remediation of a site viii) Incremental provision for retirement benefits arising out of change in actuarial assumptions, largely due to lower interest rates
B) i) ii) iii)
C)
Total exceptional expenditure Net Taxation on the above - (Charge) on current tax - Credit/ (Charge) on deferred tax Total tax credit / (Charge) (net) Exceptional items (net of tax) Extraordinary Items Profit arising on disposal of a brand Profit on disposal of a business Total extraordinary income Cost in relation to buyback of shares Total extraordinary expenditure Net Taxation on the above - (Charge) on current tax One time reduction in tax liability arising from amalgamation of Modern Food Industries (India) Limited (a wholly owned subsidiary) with Hindustan Unilever Limited Total tax credit / (charge) - net Extraordinary items (net of tax) Share of Joint Venture - schedule 20 (b) Total of Exceptional / Extraordinary Items (A+B+C)
15 months ended 31st March, 2009
12 months ended 31st December, 2007
(25,00.00) (60,51.51)
– –
(197,28.59) (7,72.57) (22,16.55) 43,42.78 21,26.23 13,53.66
(43,35.78) 171,78.71 (28,55.15) (16,51.78) (45,06.93) 126,71.78
1,50.48 – 1,50.48 – – 1,50.48 (51.15) –
– 11,77.09 11,77.09 (6,00.00) (6,00.00) 5,77.09 (1,12.20) 45,77.03
(51.15) 99.33 – 14,52.99
44,64.83 50,41.92 – 177,13.70
12
Consequent to the change in the accounting year of Hindustan Unilever Limited from January - December to April - March with effect from the current year, the current year’s financial statements are for 15 months from 1st January, 2008 to 31st March, 2009. The previous year figures relate to the 12 months ended 31st December, 2007. In view of the above, the current year’s figures are accordingly, not comparable to those of previous year.
13
Capgemini Business Services (India) Limited in which Group holds 49% of shares, has not been consolidated as an associate for the 15 months period ended 31st March, 2009, as the group does not participate in the management of the Company.
14
Closing Stock - Consequent to implementation of SAP transaction system, there has been a standardisation in definition of inventory items leading to their reclassification. The comparable numbers of the previous period are not determinable, hence not regrouped.
120
Hindustan Unilever Limited
Back to 'What's Inside'
Consolidated
/05&4 to the Profit and Loss Account (Contd.)
15
15 months ended 31st March, 2009
12 months ended 31st December, 2007
2504,50.51
1914,88.97
2,17,86,39,191
2,20,45,77,163
11.50
8.69
2,18,31,40,719
2,21,00,31,876
11.47
8.66
Earnings Per Share has been computed as under: Net Profit (Rs. lakhs) Weighted average number of Equity shares outstanding Earnings Per Share (Rs. ) - Basic ( Face value of Re.1 per share) Weighted average number of Equity shares (including dilutive) outstanding Earnings Per Share (Rs. ) - Diluted (Face value of Re. 1 per share)
16
The significant leasing arrangements of the Companies in the Group are in respect of operating leases for premises (residential, office, stores, godown etc.) and computers. These leasing arrangements which are not non-cancellable range between 11 months and 10 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as in the Rent in the profit and loss account (Note 4).
17
The Consolidated Financial Statements have been prepared in accordance with Accounting Standard 21 (AS 21) - “Consolidated Financial Statements” and Accounting Standard 27 (AS 27) - “Financial Reporting of Interest in Joint Ventures”, notified u/s 211 (3C) of the Companies Act, 1956. Refer Schedule 20 to the Balance sheet.
18
Taxation adjustments of previous years include interest, etc.
19
The previous year’s figures have been regrouped / restated wherever necessary to conform to this year’s classification.
Financial Statements
Annual Report 2008-09
121
Back to 'What's Inside'
Consolidated
4$)&%6-&4 to the Balance Sheet
Rs. lakhs
1
As at 31st March, 2009
As at 31st December, 2007
225,00.00
225,00.00
217,98.76
217,74.63
217,98.76
217,74.63
CAPITAL Authorised 2,25,00,00,000 equity shares of Re. 1 each Issued and subscribed 2,17,98,76,077 (2007: 2,17,74,63,355) equity shares of Re. 1 each fully called and paid up Of the above shares i) 1,13,48,49,460
ii)
79,53,79,675
iii)
1,31,68,54,620
Shares of Re. 1 each are held by Unilever PLC., the holding company, and its subsidiaries including 79,48,06,750 shares of Re. 1 each held by Unilever PLC. Shares of Re. 1 each are allotted as fully paid up pursuant to a contract for a consideration other than cash. Shares of Re. 1 each are allotted as fully paid up bonus shares by way of capitalisation of share premium and accumulated profits.
Note : 1.
2.
Hindustan Unilever Limited has granted share options under the Company’s Employees’ Stock Option Scheme and share options outstanding as at 31st March, 2009 are 47,62,792 (2007 - 73,06,750). Of these 8,23,005 (2007 - 12,47,400) options have vested in 2004, 11,92,733 (2007 - 17,59,635) have vested in 2005, 13,03,310 (2007 - 19,06,515) have vested in 2006, 6,27,744 have vested in 2007 (2007 - 10,67,700) and 8,16,000 have vested in 2008 (2007 - 13,25,500). During the year 24,12,722 (2007 - 9,23,030) options were exercised. During the year, Nil (2007 - 3,02,35,772) equity shares have been bought back pursuant to the buy back programme. Rs. lakhs
2
As at 31st December, 2007
Additions
Deductions
As at 31st March, 2009
4,22.23 5,05.22 4,17.36 – 66.59 2,51.05 5,36.66 21,99.11
– – – 39,19.08 – – – 39,19.08
– – – – – – (1,31.28) (1,31.28)
4,22.23 5,05.22 4,17.36 39,19.08 66.59 2,51.05 4,05.38 59,86.91
– – – – (176,92.44)
12,26.40 26.72 1328,96.59 1341,49.71 518,11.83
RESERVES AND SURPLUS Capital Reserves Capital Reserve Capital Subsidy Capital Redemption Reserve Share Premium Account Revaluation Reserve Other Reserves (c) Employee Stock Options (d) Total Capital Reserves Revenue Reserves Export Profit Reserve Development Allowance Reserve General Reserve Total Revenue Reserves PROFIT AND LOSS ACCOUNT BALANCE
12,26.40 26.72 1078,96.59 1091,49.71 176,92.44
TOTAL RESERVES - 31st March, 2009
1290,41.26
807,30.91
(178,23.72)
(e)
1919,48.45
TOTAL RESERVES - 31st December, 2007
2402,79.90
238,83.67
(1351,22.31)
(e)
1290,41.26
122
Hindustan Unilever Limited
(d)
(a)
– – 250,00.00 250,00.00 518,11.83
(d)
(b)
Back to 'What's Inside'
Consolidated
4$)&%6-&4 to the Balance Sheet (Contd.) 2
RESERVES AND SURPLUS (Contd. ) (a)
Transfer from profit and loss account
(b)
Transfer to profit and loss account
(c)
Not available for capitalisation / declaration of dividend / share valuation.
(d)
Comprises Rs. 37,87.80 lakhs received on allotment of shares under the Hindustan Unilever Limited’s Employees Stock Option Scheme and balance transfer of Rs. 1,31.28 lakhs from Employee Stock Option Reserve on account of options exercised. Rs. lakhs As at 31st December, 2007
Additions
Deductions
As at 31st March, 2009
7,51.82 (2,15.16) 5,36.66
– – –
– (1,31.28) (1,31.28)
7,51.82 (3,46.44) 4,05.38
Employee Stock Options Employee Stock Options Outstanding Less:- Transfer to share premium Employee Stock Options (e)
Including share of Joint Venture Rs. 39,62.25 lakhs (2007 - Rs. 35,25 lakhs) Rs. lakhs
3
As at 31st March, 2009
As at 31st December, 2007
25,64.91
25,51.86
130,63.81
13,34.42
156,28.72 – 156,28.72
38,86.28 – 38,86.28
SECURED LOANS Loans and Advances from banks: – Bank overdrafts Secured by hypothecation of stocks and book debts – Export Packing Credit Secured by a pari passu charge on stocks and book debts Share of Joint Venture - schedule 20 (b)
Financial Statements
Annual Report 2008-09
123
Back to 'What's Inside'
Consolidated
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs
4
As at 31st March, 2009
As at 31st December, 2007
250,00.00 24,27.25 3,23.24
– 62,11.66 –
34.17
1,17.03
277,84.66 – 277,84.66
63,28.69 – 63,28.69
UNSECURED LOANS Short- term loans & advances: From Banks – Working Capital loan – Overdrawn book balance on current account – Export Packing Credit Other loans and advances – Other than from Banks [repayable within one year Rs. 24.34 lakhs (2007 - Rs. 82.86 lakhs)] Share of Joint Venture - schedule 20 (b)
Rs. lakhs GROSS BLOCK
5
DEPRECIATION Cost/ Valuation as at 31st March 2009
Cost/ Valuation as at 31st December 2007
Additions
- Freehold
57,69.48
–
(6.82)
57,62.66
–
–
- Lease hold
33,78.41
–
(7.58)
33,70.83
3,53.89
38.41
Deductions/ Transfers
As at 31st December, 2007
Additions
NET BLOCK As at 31st March 2009
As at 31st March 2009
As at 31st December, 2007
–
–
57,62.66
57,69.48
(3.97)
3,88.33
29,82.50
30,24.52
Deductions/ Transfers
FIXED ASSETS
Land
Buildings
658,20.01
51,52.35
(17,50.30)
692,22.06
143,00.32
21,40.74
(92.97)
163,48.09
528,73.97
515,19.69
1586,84.19
215,33.94
(64,39.67)
1737,78.46
747,34.27
143,89.70
(50,21.18)
841,02.79
896,75.67
839,49.92
0.59
–
–
0.59
0.59
–
–
0.59
–
–
Furniture, fittings & office equipments
162,95.81
10,43.76
(15,40.98)
157,98.59
100,05.85
11,80.46
(15,36.38)
96,49.93
61,48.66
62,89.96
Trade Marks
144,85.03
–
–
144,85.03
144,85.03
–
–
144,85.03
–
–
Goodwill
6,34.15
–
–
6,34.15
6,34.15
–
–
6,34.15
–
–
Software
52,59.09
48,61.43
–
101,20.52
10,90.57
20,33.89
–
31,24.46
69,96.06
41,68.52
4,02.07
1.57
(65.89)
3,37.75
3,28.99
31.08
(60.32)
2,99.75
38.00
73.08
2707,28.83
325,93.05
(98,11.24)
2935,10.64
1159,33.66
198,14.28
(67,14.82)
1290,33.12
1644,77.52
1547,95.17
Plant & machinery Railway sidings
Motor vehicles Total Share of Joint Venture - Schedule - 20(b)
19,97.23
4,10.42
(4.48)
24,03.17
9,02.40
1,83.22
(3.53)
10,82.09
13,21.08
10,94.83
Total - 2009
2727,26.06
330,03.47
(98,15.72)
2959,13.81
1168,36.06
199,97.50
(67,18.35)
1301,15.21
1657,98.60
1558,90.00
- 2007
2697,48.25
283,99.41
(254,21.60)
2727,26.06
1228,41.80
141,90.59
(201,96.33)
1168,36.06
1558,90.00
a)
Capital expenditure commitments - Rs. 132,29.80 lakhs (2007 - 149,92.01 lakhs)
b)
The title deeds of immovable properties aggregating Rs. 57,49.04 lakhs (2007 - 55,78.10 lakhs), acquired on transfer of business/undertakings are in the process of being transferred in the name of the Company.
c)
Under the Gudalur Janmam Estates (Abolition and Conversion into Ryotwari) Act, 1969, the right and title to certain leasehold land may be altered at a later date, the nature and effect of which cannot be ascertained at present. However, appropriate steps have been taken to protect the Company’s interest.
124
Hindustan Unilever Limited
Back to 'What's Inside'
Consolidated
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs As at 31st March, 2009
As at 31st December, 2007
1.05 –
1.05 12,14.60
1.05
12,15.65
47,45.71
52,17.26
4,54.85
4,54.85
0.05
0.05
6 INVESTMENTS (Long term, Unquoted, unless otherwise stated) A
INVESTMENTS IN GOVERNMENT SECURITIES 7 Year National Savings Certificates - II Issue Government of India Stock (2007 - Rs. 12,00.00 lakhs) (Rs. 10,00.00 lakhs purchased during the period) (Rs. 22,00.00 lakhs sold during the period) (Current Investments) (Quoted) TOTAL - A
B Tata Chemicals Limited
TRADE INVESTMENTS AT COST SHARES 5,032,000
Capgemini Business Services (India) Limited
2,450
Dugdha Sahakari Kraya-Vikraya Samiti Limited
50
Hi Tech Surfactants Limited Aquagel Chemicals Private Limited
Super Bazar Co-op. Stores Limited
Shares of Rs. 100 each fully paid Equity shares of Rs. 10 each fully paid Equity shares of Rs. 100 each fully paid
5.87 2,65.56
5.87 2,65.56
913,000
7% Cumulative Redeemable Preference Shares of Rs. 100 each fully paid
9,13.00
9,13.00
Equity shares of Rs. 10 each fully paid
0.10
0.10
Equity share of Rs. 10,000 each fully paid
0.10
0.10
Equity shares of Rs. 100 each fully paid
2.40
2.40
– 63,87.64
– 68,59.19
24.00
24.00
1
Goldfield Fragrances Private Limited
Ordinary shares of Rs. 100 each fully paid
58,400 284,040
1,000
Coffee Futures India Exchange Limited
(2007-5,532,000)Equity shares of Rs. 10 each fully paid (Quoted) (5,00,000 shares sold during the period)
7,164
Share of Joint Venture TOTAL - B C Comfund Financial Services India Limited Assam Bengal Cereals Limited The Bengal Chamber of Commerce & Industry Woodlands Hospital and Medical Research Centre Limited
NON-TRADE INVESTMENTS AT COST SHARES, DEBENTURES & BONDS 240,000 8,284 14
Equity shares of Rs. 10 each fully paid 6 1/2% Non-redeemable Registered Debentures (Face value Rs. 0.14 lakhs)
0.83 0.17
0.83 0.17
1
5% Non-redeemable Registered Debenture stock (Face value Rs. 0.27 lakhs)
0.27
0.27
–
–
– 0.20
– 0.20
10.00 1.00
10.00 1.00
44 Shillong Club Limited The Nilgiri Co-operative Enterprises Limited Biotech Consortium India Limited Scooters India Limited
Equity shares of Rs. 10 each fully paid
56 200 100,000 10,000
1/2% Debentures of Rs. 100 each (Face value Rs. 0.05 lakhs : Cost Rs. 100) 5% Debentures of Rs. 100 each (Cost Rs. Nil) Shares of Rs. 100 each fully paid Equity shares of Rs. 10 each fully paid Equity shares of Rs. 10 each fully paid (Quoted)
Financial Statements
Annual Report 2008-09
125
Back to 'What's Inside'
Consolidated
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs As at 31st March, 2009
As at 31st December, 2007
7.02
7.02
–
–
0.20
0.20
6 INVESTMENTS (Contd.) (Long term, Unquoted, unless otherwise stated) S.C. Johnson Products Private Limited
1,104,000
(2007 - 1,104,000) equity shares of Rs. 5 each fully paid
Annamallais Ropeway company Limited
1,150
Ordinary shares of Rs. 100 each fully paid (Cost Rs. Nil)
Saraswat Co-operative Bank Limited
2,005
Equity shares of Rs. 10 each fully paid
National Bank for Agriculture and Rural Development
National Housing Bank Rural Electrification Board
–
(2007-9,250) 5.50% Capital Gains Bonds of Rs. 10,000 each (9,250 bonds Redeemed during the period)
–
9,25.00
–
(2007-870 ) 5.20% Capital Gains Bonds of Rs. 10,000 each (870 bonds Redeemed during the period)
–
87.00
–
(2007-72,000) 5.40% Capital Gains Bonds of Rs. 10,000 each (72,000 bonds Redeemed during the period)
–
72,00.00
–
(2007-13,500) 5.20% Capital Gains Bonds of Rs. 10,000 each (13,500 bonds Redeemed during the period)
–
13,50.00
–
(2007-2,000) 5.42% Capital Gains Bonds of Rs. 10,000 each (2,000 bonds Redeemed during the period)
–
2,00.00
–
(2007-17,484) 5.25% Capital Gains Bonds of Rs. 10,000 each (17,484 bonds Redeemed during the period)
–
17,48.39
–
(2007-15,500) 5.50% Capital Gains Bonds of Rs. 10,000 each (15,500 bonds Redeemed during the period)
–
15,50.00
213,000
5.50% Capital Gains Bonds of Rs. 10,000 each
213,00.00
213,00.00
500
5.50% Capital Gains Bonds of Rs. 10,000 each
50.00
50.00
OTHERS Unit Trust of India
–
Units of Rs. 100 each under the 6.75% Tax Free US 64 Bonds (2008-4,877,837 bonds sold during period) (Current Investments) (Quoted)
–
47,43.70
5,000
Master gain 92 of Rs. 10 each Certificate of Deposit of the face value of Rs. 1000.00 lakhs (Rs. 1000.00lakhs purchased during the period)
0.50 9,-90.74
0.50 –
Certificate of Deposits - State Bank of Bikaner and Jaipur Fortis Mutual Fund (Formerly known as ABN Amro Mutual Fund)
126
Hindustan Unilever Limited
–
(2007-10,000,000 ) Units Fortis Fixed Term Plan Series 5 - 13 Months sold during the period) (Current Investments)
–
10,00.00
–
Units Fortis Interval Fund - Monthly Plan A - DividendRed (15,000,000 Units Purchased, 162,097 Units cumulated, 15,162,097 Units sold during the period) (Current Investments)
–
–
–
Units Fortis Interval Fund - Quarterly Plan H - DividendRed( 10,000,000 Units Purchased, 179,880 Units cumulated, 10,179,880 Units sold during the period) (Current Investments)
–
–
Back to 'What's Inside'
Consolidated
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs As at 31st March, 2009
As at 31st December, 2007
6 INVESTMENTS (Contd.) (Long term, Unquoted, unless otherwise stated) Fortis Mutual Fund (Formerly known as ABN Amro Mutual Fund)
–
Units Fortis Interval Fund - Series 2 - Quarterly Plan M - Interval Dividend-Red( 39,990,604 Units Purchased, 402,799 Units cumulated, 40,393,403 Units sold during the period) (Current Investments)
–
–
Birla Mutual Fund
–
Units Birla Sun Life Cash Plus - Institutional Premium Plan - Daily Dividend( 2,286,476,854 Units Purchased, 3,311,429.44 Units cumulated, 2,289,788,283 Units sold during the period) (Current Investments)
–
–
–
Units Birla Sun Life Cash Plus - Institutional Premium Plan - Weekly Dividend( 31,906,196 Units Purchased, 254,742 Units cumulated, 32,160,938 Units sold during the period) (Current Investments)
–
–
–
Birla Sun Life Cash Plus - Institutional Weekly Dividend Units Purchased and sold during the year 474,0756 ) (Previous Year Nil)
–
–
–
Units Birla Sun Life Fixed Term Plan - Series AQ Institutional Plan - Growth( 10,000,000 Units Purchased, 10,000,000 Units sold during the period) (Current Investments)
–
–
–
Units Birla Sun Life Fixed Term Plan - Series AR Institutional Plan - Growth( 5,000,000 Units Purchased, 5,000,000 Units sold during the period) (Current Investments)
–
10,00.00
–
(2007-10,000,000 ) Units Birla Sun Life Fixed Term Plan - Series S - Institutional Plan - Growth( 10,000,000 Units sold during the period) (Current Investments)
–
–
–
(2007-20,000,000 ) Units Birla Sun Life Fixed Term Plan - Series T - Institutional Plan - Growth( 20,000,000 Units sold during the period) (Current Investments)
–
20,00.00
–
Units Birla Sun Life Interval Income Fund Monthly Plan Series II - Institutional Plan - Dividend ( 40,000,000 Units Purchased, 291,368 Units cumulated, 40,291,368 Units sold during the period) (Current Investments)
–
–
–
Units Birla Sun Life Interval Income Fund Quarterly Plan Series III - Institutional Plan - Dividend( 25,000,000 Units Purchased, 139,089 Units cumulated, 25,139,089 Units sold during the period) (Current Investments)
–
–
–
Units Birla Sun Life Liquid Plus - Institutional Plan - Daily Dividend( 280,322,206 Units Purchased, 2,065,169 Units cumulated, 282,387,375 Units sold during the period) (Current Investments)
–
–
–
(2007-106,753,740 ) Units Birla Sun Life Liquid Plus Institutional Plan - Weekly Dividend( 132,057,084 Units Purchased, 3,147,323 Units cumulated, 241,958,147 Units sold during the period) (Current Investments)
–
106,86.99
Financial Statements
Annual Report 2008-09
127
Back to 'What's Inside'
Consolidated
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs As at 31st March, 2009
As at 31st December, 2007
6 INVESTMENTS (Contd.) (Long term, Unquoted, unless otherwise stated) DSP Blackrock Mutual Fund (Formerly known as DSP Merrill Lynch Fund)
–
Units DSP BlackRock Cash Plus Fund - Institutional Plan - Daily Dividend( 299,970 Units Purchased, 269 Units cumulated, 300,239 Units sold during the period) (Current Investments)
–
–
–
Units DSP BlackRock Fixed Maturity Plan - 12.5 Months - Series 1 - Institutional Plan - Growth (35,000,000 Units Purchased, 35,000,000 Units sold during the period) (Current Investments)
–
–
–
Units DSP BlackRock Fixed Maturity Plan - 3 Months Series 10 - Reg - Dividend( 20,000,000 Units Purchased, 359,597 Units cumulated, 20,359,597 Units sold during the period) (Current Investments)
–
–
–
Units DSP BlackRock Fixed Maturity Plan - 3 Months Series 13 - Institutional Plan - Dividend (15,000,000 Units Purchased, 15,000,000 Units sold during the period) (Current Investments)
–
–
Deutsche Mutual Fund
–
Units DWS Quarterly Interval Fund - Series 1 - Dividend( 30,000,000 Units Purchased, 564,036 Units cumulated, 30,564,036 Units sold during the period) (Current Investments)
–
–
Franklin Templeton Fund
–
(2007-70,000,000 ) Units Templeton Fixed Horizon Fund - Series 1 - 13 Months - Institutional Plan - Growth( 70,000,000 Units sold during the period) (Current Investments)
–
70,00.00
–
(2007-30,000,000 ) Units Templeton Fixed Horizon Fund - Series 1 - 15 Months - Institutional Plan - Growth( 30,000,000 Units sold during the period) (Current Investments)
–
30,00.00
–
Units Templeton Floating Rate Interest Fund - Liquid Optioning Term - Super Institutional Plan - Daily Dividend( 41,348,009 Units Purchased, 797,423 Units cumulated, 42,145,432 Units sold during the period) (Current Investments)
–
–
–
(2007-220,032 ) Units Templeton India Treasury Management Account - Super Institutional Plan - Daily Dividend( 12,472,078 Units Purchased, 15,904 Units cumulated, 12,708,014 Units sold during the period) (Current Investments)
–
22,00.87
–
(2007-20,000,000)Units Templeton Fixed Term fundSeries VII(370Days Yearly Series)-Growth (20,000,000 Units sold during the period) (Current Investments)
–
20,00.00
–
Units Templeton India Treasury Management Account Super Institutional Plan - Weekly Dividend( 236,127 Units Purchased, 1,966 Units cumulated, 238,093 Units sold during the period) (Current Investments)
–
–
128
Hindustan Unilever Limited
Back to 'What's Inside'
Consolidated
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs As at 31st March, 2009
As at 31st December, 2007
6 INVESTMENTS (Contd.) (Long term, Unquoted, unless otherwise stated) Franklin Templeton Fund
HDFC Mutual Fund
HSBC Mutual Fund
–
Units Templeton India Ultra Short Bond Fund - Super Institutional Plan - Dividend( 49,906,176 Units Purchased, 434,396 Units cumulated, 50,340,572 Units sold during the period) (Current Investments)
–
–
–
Units Templeton Quarterly Interval Fund - Plan C - Institutional Plan - Dividend( 14,982,171 Units Purchased, 311,829 Units cumulated, 15,294,000 Units sold during the period) (Current Investments)
–
–
–
Units HDFC Cash Management Fund - Savings Plan - Daily Dividend( 868,095,751 Units Purchased, 1,225,922 Units cumulated, 869,321,673 Units sold during the period) (Current Investments)
–
–
–
(2007-4,497,777 ) Units HDFC Cash Management Fund - Savings Plus - Wholesale - Daily Dividend (97,978,456 Units Purchased, 1,682,725 Units cumulated, 104,158,957 Units sold during the period) (Current Investments)
–
4,51.19
–
(2007-9,973,810 ) Units HDFC Floating Rate Interest Fund - Short Term Fund - WP - Daily Dividend ( 42,662,373 Units Purchased, 197,048 Units cumulated, 52,833,231 Units sold during the period) (Current Investments)
–
10,05.45
–
(2007-25,000,000 ) Units HDFC Fixed Maturity Plan - 14M - March 2007 (3) - Institutional Plan - Growth( 25,000,000 Units sold during the period) (Current Investments)
–
25,00.00
–
(2007-18,000,000 ) Units HDFC Fixed Maturity Plan 16M - December 2006 (2) - Institutional Plan - Growth( 18,000,000 Units sold during the period) (Current Investments)
–
18,00.00
–
(2007-35,000,000 ) Units HDFC Fixed Maturity Plan - 16M - January 2007 (3) - Institutional Plan - Growth( 35,000,000 Units sold during the period) (Current Investments)
–
35,00.00
–
Units HDFC Fixed Maturity Plan - 90D - June 2008 (8) - 3 - WP - Dividend( 20,000,000 Units Purchased, 398,000 Units cumulated, 20,398,000 Units sold during the period) (Current Investments)
–
–
–
Units HDFC Fixed Maturity Plan - 90D - Sep 2008 (9) - 3 - WP - Dividend (40,000,000 Units Purchased, 40,000,000 Units sold during the period) (Current Investments)
–
–
–
(2007-35,190,144) Units HSBC Cash Fund - Institutional Plus - Daily Dividend( 374,855,063 Units Purchased, 470,253 Units cumulated, 410,515,460 Units sold during the period) (Current Investments)
–
35,20.99
Financial Statements
Annual Report 2008-09
129
Back to 'What's Inside'
Consolidated
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs As at 31st March, 2009
As at 31st December, 2007
6 INVESTMENTS (Contd.) (Long term, Unquoted, unless otherwise stated) HSBC Mutual Fund
ICICI Prudential Mutual Fund
130
Hindustan Unilever Limited
–
Units HSBC Cash Fund - Institutional Plus - Weekly Dividend( 14,949,173 Units Purchased, 53,672 Units cumulated, 15,002,845 Units sold during the period) (Current Investments)
–
–
–
(2007-12,000,000 ) Units HSBC Fixed Term Series 21 Institutional Plan - Growth( 12,000,000 Units sold during the period) (Current Investments)
–
12,00.00
–
(2007-20,000,000 ) Units HSBC Fixed Term Series 22 Institutional Plan - Growth( 20,000,000 Units sold during the period) (Current Investments)
–
20,00.00
–
(2007-20,000,000 ) Units HSBC Fixed Term Series 25 Institutional Plan - Growth( 20,000,000 Units sold during the period) (Current Investments)
–
20,00.00
–
Units HSBC Interval Fund - Plan II - Institutional - Dividend( 9,999,900 Units Purchased, 9,999,900 Units sold during the period) (Current Investments)
–
–
–
(2007-16,059,751 ) Units HSBC Liquid Plus Fund Institutional Plan Plus - Daily Dividend( 122,968,909 Units Purchased, 1,102,332 Units cumulated, 140,130,992 Units sold during the period) (Current Investments)
–
16,08.00
–
(2007-41,608,345 ) Units ICICI Prudential Flexible Income Plan - Daily Dividend( 809,410,429 Units Purchased 3,278,883 Units cumulated 854,297,657 Units sold during the period) (Current Investments)
–
43,99.46
–
(2007-103,861,276 ) Units ICICI Prudential Flexible Income Plan - Weekly Dividend( 390,308,378 Units Purchased 8,851,759.92 Units cumulated 506,021,414 Units sold during the period) (Current Investments)
–
109,51.26
–
(2007-30,000,000 ) Units ICICI Prudential Fixed Maturity Plan - S 35 - 13 Months - Plan B - Institutional Plan - Growth(30,000,000 Units sold during the period) (Current Investments)
–
30,00.00
–
Nil (2007 -5,234,337.17) units of ICICI Prudential Interval Fund - Quarterly Interval Plan I - Retail Dividend (235,288.80 units cumulated, 5,469,625.97 sold during the year) (Current Investments)
–
5,23.42
–
Nil (2007-10,177,901.89) units of ICICI Prudential Interval Fund - Quarterly Interval Plan II - Retail Dividend (189,003.64 units cumulated, 10,366,905.53 sold during the year) (Current Investments)
–
10,17.79
Back to 'What's Inside'
Consolidated
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs As at 31st March, 2009
As at 31st December, 2007
6 INVESTMENTS (Contd.) (Long term, Unquoted, unless otherwise stated) ICICI Prudential Mutual Fund
–
Nil (2007-6,000,000) units of ICICI Prudential Interval Fund II - Quarterly Interval - Plan F - Retail Dividend (112,680 units cumulated, 6,112,680 sold during the year) (Current Investments)
–
6,00.00
–
Nil (2007-2,030,011.34) units of ICICI Prudential Liquid - Super IP - Weekly Dividend (5,035.40 units cumulated, 2,035,046.74 units sold during the year) (Current Investments)
–
2,03.17
–
(2007-35,000,000 ) Units ICICI Prudential Fixed Maturity Plan - Series 34 - 16 Month Plan - Institutional Plan - Growth(35,000,000 Units sold during the period) (Current Investments)
–
35,00.00
–
(2007-25,000,000 ) Units ICICI Prudential Fixed Maturity Plan - Series 37 - 14 Months Plan - Institutional Plan - Growth(25,000,000 Units sold during the period) (Current Investments)
–
25,00.00
–
Units ICICI Prudential Fixed Maturity Plan - Series 43 - 13M - Plan D - Ret - Growth( 13,000,000 Units Purchased, 13,000,000 Units sold during the period) (Current Investments)
–
–
–
Units ICICI Prudential Fixed Maturity Plan - Series 44 - 3M - Plan A - Ret - Dividend( 20,000,000 Units Purchased, 344,000 Units cumulated, 20,344,000 Units sold during the period) (Current Investments)
–
–
–
Units ICICI Prudential Fixed Maturity Plan - Series 44 - 3M - Plan D - Ret - Dividend( 20,000,000 Units Purchased, 386,200 Units cumulated, 20,386,200 Units sold during the period) (Current Investments)
–
–
–
(2007-24,822,026 ) Units ICICI Prudential Interval Fund - Monthly Interval II - Dividend(305,781 Units cumulated, 25,127,807 Units sold during the period) (Current Investments)
–
25,00.00
–
Units ICICI Prudential Interval Fund - Quarterly Interval I - Dividend( 29,997,300 Units Purchased, 541,403 Units cumulated, 30,538,703 Units sold during the period) (Current Investments)
–
–
–
Units ICICI Prudential Interval Fund II - Quarterly Interval Plan C - Dividend( 40,000,000 Units Purchased, 721,543 Units cumulated, 40,721,543 Units sold during the period) (Current Investments)
–
–
–
Units ICICI Prudential Interval Fund IV - Quarterly Interval - Plan B - Institutional Plan - Dividend( 20,000,000 Units Purchased, 20,000,000 Units sold during the period) (Current Investments)
–
–
–
(2007-12,511,745 ) Units ICICI Prudential Liquid Institutional Plus - Growth( 12,511,745 Units sold during the period) (Current Investments)
–
21,00.00
Financial Statements
Annual Report 2008-09
131
Back to 'What's Inside'
Consolidated
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs As at 31st March, 2009
As at 31st December, 2007
6 INVESTMENTS (Contd.) (Long term, Unquoted, unless otherwise stated) ICICI Prudential Mutual Fund
–
(2007-38,429,007 ) Units ICICI Prudential Liquid - Super Institutional Plan - Daily Dividend (3,679,807,926 Units Purchased 3,844,308.77 Units cumulated 3,722,081,243 Units sold during the period) (Current Investments)
–
38,43.09
Principal Mutual Fund
–
Units Principal Cash Management Fund Liquid OptionInstitutional Premium Plan - Daily Dividend( 594,079,877 Units Purchased, 602,131 Units cumulated, 594,682,008 Units sold during the period) (Current Investments)
–
–
–
Units Principal Floating Rate Fund - Fixed Maturity Plan - Institutional Plan - Daily Dividend( 203,384,641 Units Purchased, 2,403,467 Units cumulated, 205,788,108 Units sold during the period) (Current Investments)
–
–
–
Units Principal Floating Rate Fund - Fixed Maturity Plan - Institutional Plan - Weekly Dividend( 24,998,231 Units Purchased, 162,757 Units cumulated, 25,160,988 Units sold during the period) (Current Investments)
–
–
–
Units Principal PNB Fixed Maturity Plan 91 Days Yearly Series - Series XVII - Institutional Plan - Dividend( 25,000,000 Units Purchased, 25,000,000 Units sold during the period) (Current Investments)
–
–
–
(2007-10,000,000 ) Units Reliance Fixed Horizon Fund 2 - AP - Series 6 - Institutional Plan - Growth( 10,000,000 Units sold during the period) (Current Investments)
–
10,00.00
–
Units Reliance Fixed Horizon Fund 8 - Series 7 - Institutional Plan - Dividend( 50,000,000 Units Purchased, 50,000,000 Units sold during the period) (Current Investments)
–
–
–
(2007-19,983,813 ) Units Reliance Interval Fund Monthly Series I - Institutional Plan - Dividend( 353,412 Units cumulated, 20,337,225 Units sold during the period) (Current Investments)
–
20,00.00
–
(2007-50,281,895) Units Reliance Interval Fund - Monthly Series II - Institutional Plan - Dividend (49,977,510 Units Purchased, 344,240 Units cumulated, 100,603,645 Units sold during the period) (Current Investments)
–
50,30.89
–
Units Reliance Liquidity Fund - Daily Dividend( 100,316,316 Units Purchased, 8,195 Units cumulated, 100,324,511 Units sold during the period) (Current Investments)
–
–
–
(2007-15,000,000 ) Units SBI Magnum Debt Fund Series - 90 Days Yearly Series - 16 - Oct 07 - Dividend(245,265 Units cumulated, 15,245,265 Units sold during the period) (Current Investments)
–
15,00.00
Reliance Mutual Fund
SBI Mutual Fund
132
Hindustan Unilever Limited
Back to 'What's Inside'
Consolidated
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs As at 31st March, 2009
As at 31st December, 2007
6 INVESTMENTS (Contd.) (Long term, Unquoted, unless otherwise stated) SBI Mutual Fund
IDFC Mutual Fund (Formerly Known as Standard Chartered Mutual Fund)
Sundaram Mutual fund
Others Tata Mutual fund
–
Units SBI Magnum Debt Fund Series - 90 Days Yearly Series - 28 - Aug 08 - Ret - Dividend( 40,000,000 Units Purchased, 40,000,000 Units sold during the period) (Current Investments)
–
–
–
Units SBI Magnum Debt Fund Series - 90 Days Yearly Series - 29 - Sep 08 - Ret - Dividend( 40,000,000 Units Purchased, 40,000,000 Units sold during the period) (Current Investments)
–
–
–
Units SBI Premier Liquid Fund - Super Institutional Plan Daily Dividend( 39,870,421 Units Purchased, 167,243 Units cumulated, 40,037,664 Units sold during the period) (Current Investments)
–
–
–
Units IDFC Liquid Fund - Daily Dividend( 136,152 Units Purchased, 68 Units cumulated, 136,220 Units sold during the period) (Current Investments)
–
–
–
Units IDFC-Fixed Maturity Plan - Yearly Series 20 - Plan B Growth( 20,000,000 Units Purchased, 20,000,000 Units sold during the period) (Current Investments)
–
–
–
(2007-10,000,000 ) Units IDFC-Fixed Maturity Plan Yearly Series 3 - Growth( 10,000,000 Units sold during the year) (Current Investments)
–
10,00.00
–
Grindlay's Cash Fund IP - Weekly Dividend ( Units Purchased and sold during the year - Nil ) (Previous Year 976,382 Units)
–
–
–
Grindlay's Cash Fund IP - Daily Dividend Units Purchased and sold during the year - Nil) (Previous Year 8,043,968 units)
–
–
–
Grindlay's Cash Fund - Weekly Dividend Units Purchased and sold during the year -Nil ) (Previous Year 15,025 Units)
–
–
–
Units Sundaram BNP Paribas Interval Fund - Quarterly Series - Plan B - Institutional Plan - Dividend( 15,000,000 Units Purchased, 15,000,000 Units sold during the period) (Current Investments)
–
–
–
(2007-5,056,289 ) Units Sundaram BNP Paribas Liquid Plus - Super Institutional Plan - Weekly Dividend( 168,226 Units cumulated, 5,224,515 Units sold during the period) (Current Investments)
–
5,12.32
–
(2007-5,000,000 ) Units Tata Fixed Horizon Fund - Series 7 - Plan D - Institutional Plan - Growth( 5,000,000 Units sold during the period) (Current Investments)
–
5,00.00
Financial Statements
Annual Report 2008-09
133
Back to 'What's Inside'
Consolidated
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs As at 31st March, 2009
As at 31st December, 2007
6 INVESTMENTS (Contd.) (Long term, Unquoted, unless otherwise stated) UTI Mutual Fund
–
Units UTI - F M P - June 08 - Yearly Series - Institutional Plan - Dividend( 25,000,000 Units Purchased, 460,215 Units cumulated, 25,460,215 Units sold during the period) (Current Investments)
–
–
–
(2007-5,000,000 ) Units UTI Fixed Income Interval Fund - Monthly Plan II - Institutional Plan - Dividend(95,044 Units cumulated, 5,095,044 Units sold during the period) (Current Investments)
–
5,00.00
–
Units UTI Fixed Income Interval Fund - Quarterly Plan I - Institutional Plan - Dividend( 15,000,000 Units Purchased, 15,000,000 Units sold during the period) (Current Investments)
–
–
–
Units UTI Liquid Fund - Cash Plan - Institutional Plan - Daily Dividend( 494,158 Units Purchased, 87 Units cumulated, 494,245 Units sold during the period) (Current Investments)
–
–
–
Units UTI Short Term - Fixed Maturity Plan - Series 9 - Institutional Plan - Dividend (30,000,000 Units Purchased, 30,000,000 Units sold during the period) (Current Investments)
–
–
TOTAL-C
223,84.93
1348,53.17
TOTAL A+B+C
287,73.62 (9.17) 287,64.45
1429,28.01 (9.17) 1429,18.84
240,17.74 47,46.71
1317,42.28 111,76.56
287,64.45
1429,18.84
Provision for diminution in value of long term investments TOTAL Aggregate book value of investments
Unquoted Quoted - Market Value Rs. 71,08.70 lakhs (2007 - Rs. 287,83.32 lakhs) TOTAL
134
Hindustan Unilever Limited
Back to 'What's Inside'
Consolidated
4$)&%6-&4 to the Balance Sheet (Contd.)
As at 31st March, 2009 7
DEFERRED TAX ASSETS On Employee Separation and Retirement On Other Timing Differences Other Items Share of Joint Venture - schedule 20 (b)
8
Share of Joint Venture - schedule 20 (b)
Share of Joint Venture - schedule 20 (b)
189,17.79 189,17.79 1,47.04 190,64.83
193,53.05 193,53.05 1,72.20 195,25.25
39,86.82 1096,74.09 124,35.71 189,49.63 1,75.15 1106,16.41 48.77 2558,86.58 21,66.02 2580,52.60
31,76.83 993,16.05 105,36.52 43,05.59 11.72 818,67.51 48.77 1992,62.99 11,14.43 2003,77.42
556,05.02
25,88.35 436,07.75 461,96.10
69,21.48 625,26.50 (69,21.48) 556,05.02 4,51.05 560,56.07
63,01.83 – 63,01.83 524,97.93 (63,01.83) 461,96.10 2,96.96 464,93.06
90.45 208,55.81 1627,88.01 1837,34.27 26,77.40 1864,11.67
1,14.47 204,21.10 12,25.80 217,61.37 44,80.82 262,42.19
SUNDRY DEBTORS Considered good Over 6 months old Others Considered doubtful Over 6 months old Others
28,31.52 527,73.50
69,21.48 –
Less: Provision for doubtful debts Share of Joint Venture - schedule 20 (b) 11
211,74.27 137,53.20 60,21.91 409,49.38 11.23 409,60.61
INVENTORIES (at lower of cost and net realisable value) (Note 14) Stores and spare parts, etc. Raw materials Packing materials Work-in-progress Processed chemicals Finished goods Property Development Activity - Work in Progress
10
219,05.85 146,73.63 77,80.73 443,60.21 8.88 443,69.09
DEFERRED TAX LIABILITIES On Fiscal Allowances on Fixed Assets
9
Rs. lakhs As at 31st December, 2007
CASH AND BANK BALANCES Cash on hand With Scheduled banks - on current accounts - on deposit accounts Share of Joint Ventures - schedule 20 (b)
Financial Statements
Annual Report 2008-09
135
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Consolidated
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs As at 31st March, 2009 12
OTHER CURRENT ASSETS Income accrued on investments and deposits Fixed assets held for sale (at net book value or estimated net realisable value, whichever is lower) Share of Joint Ventures - schedule 20 (b)
13
15,96.38 3,51.96
12,39.32 3,51.95
19,48.34 22.07 19,70.41
15,91.27 2,61.20 18,52.47
LOANS AND ADVANCES (Unsecured, considered good unless otherwise stated) Advances recoverable in cash or in kind or for value to be received including : (i)
579,38.41
486,66.69
Rs. 133,83.18 lakhs (2007 - Rs. 136,06.42 lakhs) not due within one year Considered doubtful Less: Provision for doubtful advances Deposits with Customs, Port Trust, Excise, etc. Current taxation (payments in excess of provisions) Fringe Benefit Taxation (payments in excess of provision) Share of Joint Venture - schedule 20 (b)
14
As at 31st December, 2007
40,01.41 619,39.82 (40,01.41)
30,77.85 517,44.54 (30,77.85) 579,38.41 139,01.72 17,52.92 4,81.81 740,74.86 21,12.46 761,87.32
486,66.69 163,96.18 – – 650,62.87 19,29.78 669,92.65
883,60.18 3352,34.94 18,63.06 49,42.81 4304,00.99 28,44.52
880,25.03 2912,04.73 9,43.66 69,63.16 3871,36.58 26,30.69
4332,45.51 *
3897,67.27 *
LIABILITIES Acceptances Sundry creditors (Schedule 19) Security advances Dividends declared pending payment / encashment Share of Joint Venture - schedule 20 (b) *There is no amount due and outstanding to be credited to Investor Education and Protection Fund
136
Hindustan Unilever Limited
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Consolidated
4$)&%6-&4 to the Balance Sheet (Contd.)
Rs. lakhs
15
As at 31st December, 2007
– – 603,33.56 871,95.04 59,61.49 1534,90.09 16,57.99 1551,48.08
17,36.81 15,45.03 553,54.92 653,23.90 41,55.75 1281,16.41 16,19.88 1297,36.29
PROVISIONS Current taxation (provisions in excess of payments) including tax on distributed profits Fringe Benefit Taxation Provision for retirement/post retirement benefits and other employee benefits Proposed dividend Miscellaneous provisions (Schedule 18) Share of Joint Venture - schedule 20 (b)
16
As at 31st March, 2009
Certain demands for increased wages, etc. received from workmen have been referred to adjudication. In the opinion of Hindustan Unilever Limited’s management, the ultimate liability to the Company, if any, with respect to such demands would not have a material effect on the accounts. Rs. lakhs
17
As at 31st March, 2009
As at 31st December, 2007
278,89.75
261,00.83
139,72.89
184,67.66
57,03.55
48,07.54
8,32.37
7,67.65
52.52 –
15,52.52 –
CONTINGENT LIABILITIES (a)
Claims made against Companies not acknowledged as debts and other matters Income-tax matters Sales tax matters-gross Rs. 211,67.84 lakhs (2007 - Rs. 279,77.04 lakhs) net of tax Excise and Custom Duty Matters- gross Rs. 86,37.86 lakhs (2007 - Rs. 72,83.04 lakhs) net of tax Other Matters-gross Rs. 12,60.98 lakhs (2007 - Rs. 11,62.93 lakhs) net of tax
(b)
Guarantees given to banks, etc. in respect of third parties Share of Joint Venture - schedule 20 (b)
Note: Future cash outflows in respect of (a) above are determinable only on receipt of judgements/decisions pending with various forums/ authorities. Rs. lakhs 18
PROVISIONS As at 1st January, 2008
Provision made during the year
Miscellaneous Provisions 41,55.75 25,00.00 Future cash outflow in respect of the above is determinable only on occurrence of uncertain future events. 19
Amounts utilised / reversed during the year
As at 31st March, 2009
(6,94.26)
59,61.49
MICRO AND SMALL SCALE BUSINESS ENTITIES There are no Micro and Small Enterprises, to whom the Companies owes dues, which are outstanding for more than 45 days as at 31st March, 2009. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Companies.
Financial Statements
Annual Report 2008-09
137
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Consolidated
4$)&%6-&4 to the Balance Sheet (Contd.) 20
The Consolidated Financial Statements have been prepared in accordance with Accounting Standard 21 (AS 21) - “Consolidated Financial Statements” and Accounting Standard 27 (AS 27) - “Financial Reporting of Interest in Joint Ventures”, notified u/s 211 (3C) of the Companies Act, 1956. (a)
The subsidiaries (which along with Hindustan Unilever Limited, the parent, constitute the Group) considered in the consolidated financial statements are: % voting power held as at 31st March, 2009
% voting power held as at 31st December, 2007
100 100 80 100 100 100 100 100 100 100 100 100 51
100 100 80 100 100 100 100 100 100 100 100 – 100
% of ownership interest at 31st March, 2009
% of ownership interest at 31st December, 2007
Kimberly - Clark Lever Private Limited India 50% The Financial Statements of the Joint Venture as audited by other auditors are drawn upto 31st March, 2009
50%
Name of the Company
Unilever India Exports Limited Bon Limited Unilever Nepal Lever Limited Davershola Estates Private Limited Ponds Exports Limited Levers Associated Trust Limited Levindra Trust Limited Hindlever Trust Limited Jamnagar Properties Private Limited Shamnagar Estates Private Limited Brooke Bond Real Estates Private Limited Lakme Lever Private Limited Hindustan Unilever Field Services Private Limited (b)
Country of Incorporation India India Nepal India India India India India India India India India India
Interest in Joint Venture The Group’s interest, in jointly controlled entity (incorporated Joint Venture) are :
Name of the Company
Country of Incorporation
Rs. lakhs
I
II
138
ASSETS 1 Fixed Assets (including capital work in progress) 2 Current Assets, Loans and Advances a) Inventories b) Sundry Debtors c) Cash and Bank Balances d) Other Current Assets e) Loans and Advances LIABILITIES 1 Shareholders Funds - Reserves and Surplus 2 Deferred Tax - Net 3 Current Liabilities and Provisions a) Liabilities b) Provisions
Hindustan Unilever Limited
As at 31st March, 2009
As at 31st December, 2007
18,53.97
12,33.13
21,66.02 4,51.05 26,77.40 22.07 21,12.46
11,14.43 2,96.96 44,80.82 2,61.20 19,29.78
(46,42.30) (1,38.16)
(49,04.77) (1,60.97)
(28,44.52) (16,57.99)
(26,30.69) (16,19.88)
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Consolidated
4$)&%6-&4 to the Balance Sheet (Contd.)
III
For the year ended
Rs. lakhs For the year ended
at 31st March, 2009
at 31st December, 2007
101,89.25
70,37.82
5,77.04
3,73.34
(101,30.55)
(63,27.66)
(1,83.22)
(1,31.51)
INCOME 1 Sales (net of excise duty) 2 Other Income
IV
EXPENSES 1 Operating expenses 2 Depreciation 3 Profit before Taxation
4,52.52
9,51.99
(15.27)
(3,51.07)
4,37.25
6,00.92
1 Contingent Liabilities
–
–
2 Capital Commitments
–
–
35,25.00
29,24.08
4 Provision for Taxation (including deferred taxation & fringe benefit tax) 5 Net Profit V
OTHER MATTERS
The movement of the aggregate reserves of the joint ventures are as under: Reserves as at 1st January Add: Group share of Profits for the year Reserves as at 31st March, 2009 21
4,37.25
6,00.92
39,62.25
35,25.00
Previous year’s figures have been regrouped wherever necessary to conform to this year’s classification.
Financial Statements
Annual Report 2008-09
139
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Consolidated
/05&4 to the Cash Flow Statement NOTES TO THE CASH FLOW STATEMENT FOR THE FIFTEEN MONTHS ENDED 31ST MARCH, 2009 1.
The cash flow statement has been prepared in accordance with the requirements of Accounting Standard 3 “Cash Flow Statements” issued by the Institute of Chartered Accountants of India.
2.
In view of note 12 to the profit and loss account, the current year’s figures are not comparable with that of the previous year’s figure.
3.
Figures in brackets indicate cash outgo.
4.
The previous year’s figures have been regrouped / restated wherever necessary to conform to this year’s classification.
140
Hindustan Unilever Limited
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Consolidated
4&(.&/5 */'03."5*0/ for the 15 Months Ended 31st March, 2009 SEGMENT INFORMATION FOR THE 15 MONTHS ENDED 31ST MARCH, 2009 INFORMATION ABOUT PRIMARY BUSINESS SEGMENTS
Rs. lakhs 15 Months ended 31st March, 2009 External REVENUE Soaps and Detergents Personal Products Beverages Foods Ice Creams Exports Other Operations Total Segment Eliminations
9880,55.65 5370,73.72 2294,46.24 810,70.76 235,14.33 1646,78.33 544,35.28 20782,74.31
Intersegment
33,64.46 7,92.63 41,57.09
Total (see note 3 to Segment Information) RESULT Soaps and Detergents Personal Products Beverages Foods Ice Creams Exports Other Operations Total Segment Total Un-allocated expenditure net of un-allocated income
12 Months Ended 31st December, 2007 Total
External
9880,55.65 5370,73.72 2294,46.24 810,70.76 235,14.33 1680,42.79 552,27.91 20824,31.40 (41,57.09)
6399,93.28 3688,56.48 1540,63.09 540,10.57 161,49.78 1420,06.05 304,40.00 14055,19.25
Intersegment
16,41.51 6,82.41 23,23.92
Total 6399,93.28 3688,56.48 1540,63.09 540,10.57 161,49.78 1436,47.56 311,22.41 14078,43.17 (23,23.92)
20782,74.31
14055,19.25
1482,31.74 1429,61.46 308,29.99 1,49.87 8,63.35 104,66.27 (101,51.09) 3233,51.59 3233,51.59
978,69.41 1026,22.50 230,02.07 15,20.04 12,41.43 46,92.30 (69,18.90) 2240,28.85 2240,28.85
(365,20.07)
(285,61.22)
Operating Profit Interest expenses Interest / dividend income and surplus on disposal of investments (net) (net of provision / write back for diminution in long term investments and mark down of current investments) Taxation for the year (including adjustments of previous years)
2868,31.52 (26,44.79) 192,74.04
1954,67.63 (26,48.58) 222,59.28
(539,20.51)
(409,04.87)
Profit after taxation, before exceptional / extraordinary items and share of Associates Profit Exceptional items - income and expenditure (Segment) Detergents Personal Products Foods Beverages Ice-Creams Exports Other Operations
2495,40.26
1741,73.46
Exceptional items - income and expenditure (Unallocated/ Corporate) Extra-ordinary item - income and expenditure (Segment) Foods Extra-ordinary item - income and expenditure (Unallocated/ Corporate) Taxation on the above One time reduction in tax liability arising from amalgamation of Modern Food Industries (India) Limited (a wholly owned subsidiary) with Hindustan Unilever Limited
(84,76.79) (29,30.63) (3,57.81) (32,63.11) (1,05.02) (19,34.23) (1,60.67)
6,55.96 8,77.86 5,83.69 1,87.86 43.65 5,24.69 3,64.07 (172,28.26)
32,37.78
164,55.69
139,40.93
1,50.48
–
–
5,77.09
20,75.08 –
(46,19.13) 45,77.03
Profit after exceptional /extraordinary items before share of Associates Profits
2509,93.25
1918,87.16
Share of Associates net profit Profit before Minority Interests
– 2509,93.25
– 1918,87.16
Financial Statements
Annual Report 2008-09
141
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Consolidated
4&(.&/5 */'03."5*0/ for the 15 Months Ended 31st March, 2009 (Contd.) SEGMENT INFORMATION FOR THE YEAR ENDED 31ST MARCH, 2009 INFORMATION ABOUT PRIMARY BUSINESS SEGMENTS
Rs. lakhs Segment Assets
Segment Liabilities
As at 31st March, 2009
As at 31st December, 2007
As at 31st March, 2009
As at 31st December, 2007
Soaps and Detergents Personal Products Beverages Foods Ice Creams Exports Other Operations Total Unallocated Corporate Assets / (Liabilities)
2539,56.53 1117,03.79 808,88.79 230,05.28 135,59.87 548,32.31 102,24.54 5481,71.11 3172,26.14
1883,67.41 943,87.46 593,70.22 159,91.31 115,38.19 607,32.29 92,12.72 4395,99.60 2609,98.53
(1947,69.36) (1054,07.09) (482,27.94) (186,02.73) (89,49.66) (210,73.84) (131,41.23) (4101,71.85) (2406,99.95)
(1758,45.40) (778,06.47) (540,21.88) (158,45.83) (77,73.80) (269,52.56) (95,36.77) (3677,82.71) (1814,49.85)
Total Assets / (Liabilities)
8653,97.25
7005,98.13
(6508,71.80)
(5492,32.56)
OTHER INFORMATION
Rs. lakhs Capital expenditure
Depreciation/Amortisation
Non - Cash expenses other than depreciation/amortisation
15 Months Ended 12 Months Ended 15 Months Ended 12 Months Ended 15 Months Ended 12 Months Ended 31st March, 31st December, 31st March, 31st December, 31st March, 31st December, 2009 2007 2009 2007 2009 2007 Soaps and Detergents
168,46.99
66,93.37
96,97.06
66,97.02
9,97.93
14,05.83
Personal Products Beverages Foods Ice Creams Exports Other Operations Unallocated Corporate Assets/ (Liabilities)
90,31.64 29,12.06 35,78.72 16,61.78 27,92.21 2,02.23 248,82.77
80,66.28 13,73.57 5,61.68 12,93.36 27,47.27 2,25.23 147,09.42
27,23.09 8,66.18 5,53.72 6,90.72 20,19.32 2,16.52 32,30.89
30,29.55 8,79.79 3,50.21 7,53.64 12,00.21 1,82.77 10,97.40
4,50.96 2,57.59 84.73 19.99 2,22.52 17.94 –
7,86.56 3,93.86 1,15.61 39.30 1,22.07 1,55.76 –
142
Hindustan Unilever Limited
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Consolidated
4&(.&/5 */'03."5*0/ for the 15 Months Ended 31st March, 2009 (Contd.) SEGMENT INFORMATION FOR THE YEAR ENDED 31ST MARCH, 2009 INFORMATION ABOUT SECONDARY BUSINESS SEGMENTS
Rs. lakhs 15 Months Ended 12 Months Ended 31st March, 2009 31st December, 2007 Revenue by Geographical Market India Outside India Total Additions to Fixed Assets and Intangible Assets India Outside India Total Carrying Amount of Segment Assets India Outside India Total Notes : 1.
18950,70.26 1832,04.05 20782,74.32
12372,53.98 1682,65.27 14055,19.25
369,21.07 1,04.56 370,25.62
207,44.43 2,16.33 209,60.76
5431,55.39 50,15.72 5481,71.11
4332,47.59 63,52.01 4395,99.60
Business Segments The business segment has been considered as the primary segment for disclosure. The products included in each of the reported domestic business segments are as follows: -
Soaps and Detergents include soaps, detergent bars, detergent powders, detergent liquids, scourers, etc. Personal Products include products in the categories of Oral Care, Skin Care (excluding soaps), Hair Care, Deodorants, Talcum Powder, Colour Cosmetics, Ayush services etc. Beverages include tea and coffee. Foods include Branded Staples (Atta, Salt, etc.), Culinary products (tomato based products, fruit based products, soups, etc.), Wheat based products (Bread, Supplementary Nutritional products, etc.). Ice Creams include Ice Creams and Frozen Desserts. Others include Chemicals, Agri seeds, Property Development, Water business etc. and the operations of Nepal Lever Limited, Nepal.
Segment Revenue relating to each of the above domestic business segments includes Income from Services provided, where applicable. In addition, the Exports business segment includes sales of Marine products, Leather products etc. as well as sales of Soaps and Detergents, Personal products, Beverages and Foods, etc. by the Exports Division. The above business segments have been identified considering : a) the nature of products and services b) the differing risks and returns c) the organisation structure, and d) the internal financial reporting systems. The Company has changed its accounting year from January - December to April - March with effect from the current year. Accordingly, the current year’s financial statements are for fifteen months from 1st January 2008 to 31st March 2009. The previous year’s figures relate to 12 months ended 31st December 2007. Hence the above figures are non comparable. 2.
Geographical Segments The geographical segments considered for disclosure are as follows : - Sales within India includes sales to customers located within India. - Sales outside India includes sales to customers located outside India.
3.
Revenue Comprises Rs. lakhs Sales Income from services rendered (included in Other Income) Total
4.
15 Months Ended 31st March, 2009
12 Months Ended 31st December, 2007
20501,10.25
13871,08.20
281,64.06
184,11.05
20782,74.31
14055,19.25
Previous year’s figures have been regrouped wherever necessary to conform to this year’s classification.
Financial Statements
Annual Report 2008-09
143
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Consolidated
3&-"5&% 1"35: %*4$-0463&4 for the 15 Months Ended 31st March, 2009 RELATED PARTY DISCLOSURES A.
Enterprises where control exists (i)
Holding Company : Unilever PLC
B.
(i)
Fellow Subsidiaries (Contd.) : Unilever Ethiopia Unilever Philippines (Prc), Inc. PT Unilever Indonesia TBK
Other Related Parties with whom the
Unilever Thai Trading Limited
company had transactions, etc.
Unilever Thai Holding Limited
(i)
Fellow Subsidiaries :
Unilever Sanayi ve Ticaret Turk A.S
Brooke Bond Assam Estates Limited
Unilever Home & Personal Care USA
Brooke Bond Group Limited
Lever Egypt SAE
Brooke Bond South India Estates Limited
Lipton Division, Canada
Lever Faberge UK
Lever Arabia Limited
Unilever U.K. Central Resources Limited
Lever Brothers Nigeria Limited
Unilever Overseas Holdings Limited
Lipton Soft Drinks (Ireland)
144
Unilever Australia Limited
Lever Israel
Lever Brothers Bangladesh Limited
Elida P/S, Vietnam
Unilever Canada
Unilever Polska
Unilever Cote d’Ivoire
Lever International Marine Supplies (LIMS) BV
Unilever Ghana Limited
Unilever Gulf Free Zone Establishment, Arabia
Unilever Kenya Limited
Unilever (China) Limited
Unilever New Zealand Limited
Unilever South Central Europe
Lever Brothers Pakistan Limited
Unilever Baltic LLC
Unilever Singapore Pte Limited
Unilever Levant, Lebanon
Unilever Foods Espana, S.A Division Frigo
Unilever Tuketim Urunleri Sat Pazarlama Ticaret A.S.
Unilever South Africa (Pty.) Limited
Unilever Best Foods, Vietnam
Unilever Ceylon Limited
Unilever SNG, Russia
Unilever Overseas Holdings AG
Unilever Taiwan Limited
Lever Brothers West Indies Limited
Unilever Ukraine
Unilever Research Laboratory, Port Sunlight
Unilever Tuketim Mersin Serbest Bolge Subesi, Turkey
Unilever Research Laboratory, Colworth House
Towells Lever LLC, Arabia
BB Kenya Group
Binzagr Lever Limited, Arabia
Unilever N.V.
Unilever Industries Private Limited
Unilever Overseas Holdings B.V.
Digital Securities Private Limited
Unilever Brasil Limited
Lever Faberge France
Lever Chile S.A.
Unilever Tanzania Limited
Unilex Cameroon S.A.
Unilever Cambodia Limited
Unilever France S.A.
Lever Faberge Belgium
Unilever International Paris
Unilever Maghreb Export SA, Tunisia
Unilever Deutschland GmbH
Unilever UK & CN Holdings, UK
Lever Faberge Deutschland GmbH
Lipton Limited UK
Unilever Hong Kong Limited
Unilever (Malaysia) Holdings Sdn Berhad
BBL Japan K.K.
Lever Ponds Division, Canada
Nippon Lever K.K.
Europalma International Insurance services B.V.
Sagit SPA, Italy
Lipton US Group
Hindustan Unilever Limited
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3&-"5&% 1"35: %*4$-0463&4
Consolidated
for the 15 Months Ended 31st March, 2009 (Contd.)
(i)
Fellow Subsidiaries (Contd.) :
(i)
Lever Faberge Italia SPA
Fellow Subsidiaries (Contd.) : Mashreq For Manufacturing Tea Limited, Egypt
Unilever United States Inc.
Unilever Hellas
Hefei Lever Detergents Co. Limited, China
Elida Nepal Limited
Unilever Korea
Lipton Tea Supply, Kenya
Unilever Vietnam
Severn Gulf FZE
Unilever Canada Foods
(ii)
Unilever Nigeria Lipton Limited (Head Office) / Lipton Tea Supply Limited Unilever Market Development SA
(iii)
(iv)
Key Management Personnel : Harish Manwani
Bestfoods Germany
Douglas Baillie (upto 4th April 2008)
Bestfoods Nordic AS (Denmark)
D.Sundaram
Unilever Bestfoods Ireland
Leena Nair (from June 2007)
Frozen Fish International GmbH, Germany
Hemant Bakshi (from September 2008)
Unilever Uganda Limited
Dhaval Buch
Unilever Finland OY
Nitin Paranjpe
Unilever Sverige AB
Ashok Gupta (from June 2007)
Unilever UK Food Manchester
Shrijeet Mishra (from June 2007)
Unilever Iran P.J.S.C
Ramamurthy Sridhar (from February 2009)
Unilever Magyarorszang KFT
Gopal Vittal (from July 2008)
Commercial United for Import
Sanjiv Kakkar (upto August 2008)
Unilever Germany GmBH - HPC
S.Ravindranath (upto April 2007)
Unilever Mozambique LDA
S.Dube (upto June 2007)
Unilever Schweiz GmBH
M.K.Sharma (upto May 2007)
Unilever Trading LLC Elida Faberge Limited
Associate : Cap Gemini Business Services (India) Limited
Bahrain Technical & Trading Co. W.L.L Unilever Bestfoods Benelux B.V. Netherlands
Joint Ventures : Kimberly Clark Lever Private Limited
(v)
Employees’ Benefit Plans where
Unilever Market Limited
there is significant influence :
Unilever Port Sunlight
Hind Lever Gratuity Fund
Fine Tea Egypt
The Union Provident Fund
Unilever Japan
The Hind Lever Provident Fund
Unilever Pakistan
The Hind Lever Pension Fund
Unilever Supply Chain Company Unilever Algerie Unilever Czech Republic Unilever De Argetina SA Unilever De Mexico De RL Unilever Espana SA Unilever Mashreq Int Unilever Australia Export Pty. Limited Unilever Asia Pte. Limited Unilever South Korea
Financial Statements
Annual Report 2008-09
145
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Consolidated
3&-"5&% 1"35: %*4$-0463&4 for the 15 Months Ended 31st March, 2009 (Contd.) Disclosure of transactions between the Company and Related Parties and the status of outstanding balances as on 31st March, 2009
Rs. lakhs
i)
ii)
iii)
Holding Company
Fellow Subsidiaries
Joint Ventures
:
:
:
15 Months ended 31st March, 2009
12 Months Ended 31st December, 2007
Dividend paid Royalty paid Income from services rendered Outstanding balances : Receivables at the period end
516,62.44 116,17.17 267,72.77
715,32.61 75,62.87 164,41.35
42,75.70
34,07.07
Sale of finished goods / raw materials etc. Sale of fixed assets Rent Received Income from services rendered Expenses shared by a fellow subsidiary Purchase of goods Dividend paid Royalty paid Revenue expenses in relation to purchase of Intangible Asset Purchase of Fixed Assets Purchase of Intangible Asset Advances and loans : Receivables Payables
983,25.30
778,03.19 18.64 1,10.00 8,48.22 6.00 119,14.37 306,03.83 1,56.59
Purchase of goods Other income Dividend received Advances and loans : Receivables
iv)
Associate
:
Expenses for services received Outstanding receivable at the period end
v)
Key Management Personnel
:
Remuneration Rent paid Dividend paid
vi)
Employees’ Benefit Plans where there is significant influence
:
Contributions during the period Outstanding receivables at the period end Outstanding payables at the period end
146
Hindustan Unilever Limited
–
1,37.50 8,61.46 7.50 257,44.56 221,02.78 2,20.01 4,46.01
–
1.16 38,72.66
– –
110,15.62 61,54.39
197,27.99 7,84.27
225,34.21 2,91.88 5,98.13
136,81.90 2,04.50 4,35.00
5,26.86
14.90
49,26.79 2,98.99
33,57.62 39.20
20,42.26 25.50 11.62 75,06.22 7,52.10 –
15,56.47 9.55 11.96 40,75.42 9,33.04 5,19.67
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Consolidated
3&-"5&% 1"35: %*4$-0463&4 for the 15 Months Ended 31st March, 2009 (Contd.)
Disclosure in respect of transactions which are more than 10% of the total transactions of the same type with related parties during the period. Rs. lakhs 15 Months ended 31st March, 2009
12 Months Ended 31st December, 2007
Sale of finished goods / raw materials etc. Unilever Gulf Free Zone Establishment, Arabia
252,52.45
251,20.89
Sale of fixed assets Unilever Gulf Free Zone Establishment, Arabia
–
18.64
Expenses shared by subsidiary companies / fellow subsidiary companies Digital Securities Private Limited
7.50
6.00
Dividend received Kimberly Clark Lever Private Limited
5,98.13
4,35.00
Rent received Unilever Industries Private Limited
1,37.50
1,10.00
Purchase of fixed assets Unilever Home & Personal Care USA
1.16
–
Purchase of goods Kimberly Clark Lever Private Limited Unilever Supply Chain Company Unilever Australia Limited Unilever Thai Holdings Limited
225,34.21 62,34.98 62,32.70 –
136,81.90 – 25,64.14 41,33.38
7.50 – – 18.00
4.22 2.83 2.50 –
Rent paid D.Sundaram S.Ravindranath M.K.Sharma Ashok Gupta Other income Kimberly Clark Lever Private Limited Dividend paid Unilever PLC
2,91.88
2,04.50
516,62.44
715,32.61
Royalty paid Unilever PLC
116,17.17
75,62.87
Outstanding balances payables at the period end Unilever N.V. Unilever Supply Chain Company Lipton Limited UK Unilever Singapore Pte Limited The Union Provident Fund Lipton Limited (Head Office) / Lipton Tea Supply Limited
24,88.78 15,92.41 9,38.84 9,11.84 – –
1,46.15 – – – 5,19.67 4,63.46
Outstanding balances receivables at the period end Unilever PLC Unilever Philippines (Prc), Inc. Unilever Gulf Free Zone Establishment, Arabia
42,75.70 19,02.38 –
34,07.07 – 55,37.91
267,72.77
164,41.35
Income from services rendered Unilever PLC Expenses for services received Cap Gemini Business Services(India) Limited
49,26.79
33,57.62
Remuneration D.Sundaram Douglas Baillie Sanjiv Kakkar Nitin Paranjpe Dhaval Buch Gopal Vittal
3,47.28 – – 3,26.69 2,26.44 2,31.81
1,78.22 4,91.34 2,15.61 2,28.27 – –
Revenue expenses in relation to purchase of Intangible Asset Unilever N.V.
4,46.01
–
Purchase of Intangible Asset Unilever Singapore Pte Limited Unilever N.V.
27,87.21 10,85.44
– –
Contributions during the period The Union Provident Fund The Hind Lever Pension Fund Hind Lever Gratuity Fund The Hind Lever Provident Fund
29,22.67 25,87.97 19,95.58 –
17,29.22 19,56.74 – 3,89.46
Financial Statements
Annual Report 2008-09
147
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Consolidated
"6%*5034’ 3&1035 to the Board of Directors of Hindustan Unilever Limited 1.
We have audited the attached consolidated Balance Sheet of Hindustan Unilever Limited, its subsidiaries and a joint venture (the Group) as at 31st March, 2009 and the related consolidated Profit and Loss Account and consolidated Cash Flow Statement for the period from 1st January, 2008 to 31st March, 2009 annexed thereto, which we have signed under reference to this report. These consolidated financial statements are the responsibility of the Company’s management and have been prepared by the management on the basis of separate financial statements and other financial information regarding components. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
2.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3.
We did not audit the financial statements of a subsidiary and a joint venture whose financial statements reflect the Group’s share of total assets of Rs. 156,05.28 lakhs as at 31st March 2009 and the Group’s share of total revenues of Rs. 299,92.53 lakhs and net cash outflows amounting to Rs. 13,92.05 lakhs for the period ended on that date as considered in the consolidated financial statements. These financial statements have been audited by other auditors whose reports have been furnished to us, and our opinion, in so far as it relates to the amounts included in respect of this subsidiary and the joint venture, is based solely on the reports of the other auditors.
4.
We report that the consolidated financial statements have been prepared by the Company’s management in accordance with the requirements of Accounting Standard 21 – Consolidated Financial Statements and Accounting Standard 27 – Financial Reporting of Interest in Joint Ventures, notified under sub-section (3C) of Section 211 of the Companies Act, 1956.
5.
Based on our audit and on consideration of the reports of other auditors on separate financial statements and on the other financial information of the components, in our opinion and to the best of our information and according to the explanations given to us, the attached consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India: (i)
in the case of the consolidated Balance Sheet, of the state of affairs of the Group as at 31st March, 2009;
(ii)
in the case of the consolidated Profit and Loss Account, of the profit for the period ended on that date; and
(iii)
in the case of the consolidated Cash Flow Statement, of the cash flows for the period ended on that date.
Sharmila A. Karve Partner Membership No: 43229 For and on behalf of Lovelock & Lewes Chartered Accountants Mumbai : 10th May 2009
148
Hindustan Unilever Limited
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45"5&.&/5 16346"/5 50 4&$5*0/ of the Companies Act, 1956 Rs. Lakhs Financial year ending of the subsidiary
Number of equity shares held
(2)
(3)
(4)
Unilever India Exports Limited
31-3-09
25,10,000
100%
3,40.74
–
84,07.97
60,86.75
Pond's Exports Limited
31-3-09
98,00,147
100%
(10,36.84)
–
(3,60.09)
–
Hindustan Unilever Field Services Private Limited
31-3-09
6,37,500
51%
12.89
–
–
–
Name of the subsidiary Company
(1)
For financial year of the subsidiary
Extent of holding
For the previous financial years since it became a subsidiary
Profits/(Losses) so far it concerns the members of the holding company and not dealt with in the books of account of the holding company (except to the extent dealt with in col. 6)
Profits/(Losses) so far it concerns the members of the holding company and dealt with in the books of account of the holding company
Profits/(Losses) so far it concerns the members of the holding company and not dealt with in the books of account of the holding company (except to the extent dealt with in col. 8)
Profits/(Losses) so far it concerns the members of the holding company and dealt with in the books of account of the holding company
(5)
(6)
(7)
(8)
Bon Limited
31-3-09
1,00,00,000
100%
(2,84.09)
–
(52,71.11)
–
Brooke Bond Real Estates Private Limited
31-3-09
1,29,46,000
100%
(3,00.69)
–
–
–
Jamnagar Properties Private Limited
31-3-09
50,00,000
100%
(14.31)
–
(14.29)
–
Shamnagar Estates Private Limited
31-3-09
1,50,00,000
100%
(20.88)
–
(20.88)
–
Daverashola Estates Private Limited
31-3-09
2,21,700
100%
(1.69)
–
(32.03)
–
15-07-08 (Ashaad 31, 2065)
7,36,560
80%
26,80.97
23,93.82
108,63.75
97,22.00
–
–
–
16,75.61
14,96.14
67,89.85
60,75.70
31-3-09
50,000
100%
–
–
–
–
Unilever Nepal Limited - Nepalese Rs.
- Indian Rs. [Refer Note (ii)] Lakme Lever Private Limited
Changes in Company’s interest in Unilever Nepal Limited between 16th July, 2008 and 31st March, 2009 : Nil Material changes between 16th July, 2008 and 31st March, 2009 in respect of fixed assets of, investments of, moneys lent and moneys borrowed(other than meeting current liabilities) by Unilever Nepal Limited : NIL Note : i) Hindustan Unilever Limited held the whole of the paid-up capital of Levers Associated Trust Limited, Levindra Trust Limited and Hindlever Trust Limited which were non-profit making organisations ii) Converted into Indian Rupees at the Exchange rate INR 1 = 1.6 Nepalese Rupees
Nitin Paranjpe D. Sundaram Ashok Gupta Vivek Subramanian D. S. Parekh
Managing Director and CEO Vice Chairman and CFO Executive Director - Legal and Company Secretary Group Corporate Accountant Chairman, Audit Committee
Mumbai : 10th May 2009
Financial Statements
Annual Report 2008-09
149
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46#4*%*"3: Companies’ Particulars Particulars regarding subsidiary companies, pursuant to letter No.47/306/2009-CL-III dated 29th April, 2009 from Ministry of Company Affairs Rs. Lakhs Issued and subscribed share capital
Provision for taxation
Profit/ (Loss) after taxation
Reserves
Total Assets
Total Liabilities
Investments
Proposed Dividend
Unilever India Exports Limited
2,51.00
25,31.19
51,06.00
(23,23.81)
–
(2,67.42)
(2,30.60)
–
Pond's Exports Limited
9,80.01
(13,85.53)
33,51.93
(37,57.45)
Hindustan Unilever Field Services Private Limited
1,25.00
1.91
17,66.04
(16,39.13)
(6,43.15)
(1,10.52)
(7,53.67)
–
1,67.33
(1,42.05)
25.28
19.98
Bon Limited
10,00.00
(55,32.91)
6,50.29
(51,83.20)
–
(2,82.79)
(1.30)
(2,84.09)
–
Brooke Bond Real Estates Private Limited
12,94.60
(3,00.69)
12,65.86
–
–
(53.42)
(2,47.27)
(3,00.69)
–
Jamnagar Properties Private Limited
5,00.00
(28.60)
4,71.40
–
–
–
(14.31)
–
(14.31)
–
Shamnagar Estates Private Limited
15,00.00
(41.75)
Daverashola Estates Private Limited
22.17
3,95.53
14,58.25
–
–
–
(20.88)
–
(20.88)
–
4,46.92
(29.22)
–
–
(0.54)
(1.15)
(1.69)
–
- Nepalese Rs.
9,20.70
- Indian Rs. [Refer Note (i)]
5,75.44
17,86.11
108,52.54
(81,45.73)
18,36.50
214,45.89
43,31.22
(9,80.00)
33,51.22
(29,92.28)
11,16.32
67,82.84
(50,91.08)
11,47.81
134,03.68
27,07.01
(6,12.50)
20,94.51
(18,70.17)
Levers Associated Trust Limited
5.00
–
5.00
–
–
–
–
–
–
–
Levindra Trust Limited
5.00
–
5.00
–
–
–
–
–
–
–
Hindlever Trust Limited
5.00
–
5.00
–
–
–
–
–
–
–
Lakme Lever Private Limited
5.00
–
5.00
–
–
–
–
–
–
–
Name of the Subsidiary Company
Profit/ Turnover (Loss) before taxation
–
36.82
0.50
104,72.79
–
56,55.93
–
(2,71.95)
Unilever Nepal Limited
Note : i) Converted into Indian Rupees at the Exchange rate INR 1 = 1.6 Nepalese Rupees ii) The aforesaid data in respect of the subsidiaries are as on 31st March, 2009 other than Unilever Nepal Limited where it is as on 15th July, 2008
Nitin Paranjpe D. Sundaram Ashok Gupta Vivek Subramanian D. S. Parekh Mumbai : 10th May 2009
150
Hindustan Unilever Limited
Managing Director and CEO Vice Chairman and CFO Executive Director - Legal and Company Secretary Group Corporate Accountant Chairman, Audit Committee
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*/7&4503 4"'&(6"3%4 In order to serve you better and avoid risks while dealing in securities, you
Demat / Exchange
are requested to follow the general safeguards as detailed hereunder:
To avail the benefits of holding shares in demat form, Members are
Update your Address To receive all communications promptly, please update your address with the Company or Depository Participants, as the case may be.
requested to convert their physical holdings to demat/electronic form through a Depository Participant (DP) of their choice. Members who are still holding the share certificates of the face value of Rs 10/- each are requested to forward their old share certificates (which are no longer
Prevention of Frauds
tradable in market and will not be accepted by the DPs for demat)
Certain instances of fraudulent transactions relating to dormant folios
to Karvy Computershare Private Limited, along with a request letter
have been observed in the cases where the shareholder has either
signed by all the holders for exchange of shares. The exchanged share
expired or has gone abroad. Hence we urge you to exercise due diligence
certificate(s) of Re. 1/- will help you demat your shares expediously.
and notify us of any change in address, stay abroad or demise of any shareholder as soon as possible. Do not leave your demat account dormant for long. Periodic statement of holdings should be obtained from the concerned DP and holdings should be verified.
Register your ECS Mandate and Nomination During the month of January 2009, the Company had dispatched a circular along with a Business Reply Envelope (BRE) to all the relevant shareholders, requesting them to register their ECS Mandates and
Confidentiality of Security Details
Nominations. The Company had also offered to help demat the physical
Do not disclose your Folio Nos./DP ID/Client ID to unknown persons. Do
shares. It appears from the Company’s records that there are quite a few
not hand over signed blank transfer deeds, delivery instruction slips to
Members who have not responded to the circular which was essentially
any unknown persons.
sent for investor’s protection. Those Members who have not registered
Dealing of Securities with Registered Intermediaries
their ECS Mandate or Nomination are requested to send their response
Members must ensure that they deal with only SEBI registered
using BRE envelope dispatched by the Company.
intermediaries and must obtain a valid contract note/confirmation memo
If your bank particulars have changed either due to your banker having
from the broker/sub-broker, within 24 hours of execution of the trade
migrated their operation to core banking solutions and/or merged with
and it should be ensured that the Contract Note/Confirmation Memo
another bank, please arrange to register the ECS Mandate with the
contains order no., trade no., trade time, quantity, price and brokerage.
revised bank particulars.
PAN Requirement for Transfer of Shares in Physical Form
Unclaimed Dividend
The Securities and Exchange Board of India (SEBI) has mandated the
To ensure maximum disbursement of unclaimed dividends, the Company
submission of Permanent Account Number (PAN) for securities market
sends two reminders to the relevant investors, before transfer of
transactions and off market/private transactions involving transfer
dividends to IEPF. Your Company is exploring the possibility of remitting
of shares in physical form of listed companies. Therefore, it shall be
the past dividends, as per the latest ECS mandates registered with the
mandatory for the transferee(s) to furnish a copy of the PAN card to the
Company.
Company/Registrar and Share Transfer Agents for registration of such transfers. Members/Investors are therefore requested to make note of the same and submit their PAN card copy to the Company/ Registrar and Share Transfer Agents.
Payment of Dividend Your Company has made continuous efforts to increase the credit of dividend disbursement through electronic media. To enhance the service levels further, your Company will now explore the possibility of
Consolidate your Multiple Folios
using National-ECS (n-ECS) for dividend remittance. The number of ECS
Members are requested to consolidate their share holdings held under
locations has now been increased from 55 to 69.
multiple folios to save them from the burden of receiving multiple communications and corporate benefits.
Investor Safeguards
Annual Report 2008-09
151
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*/7&4503 4"'&(6"3%4 List of ECS Locations Sr. No.
Location
Sr. No.
Location
Sr. No.
Location
1
:
AGRA
24
:
HALDIA
47
:
NEW DELHI
2
:
AHMEDABAD
25
:
HUBLI
48
:
NELLORE
3
:
ALLAHABAD
26
:
HYDERABAD
49
:
PANJIM
4
:
AMRITSAR
27
:
INDORE
50
:
PATNA
5
:
AURANGABAD
28
:
JABALPUR
51
:
PONDICHERY
6
:
BANGALORE
29
:
JAIPUR
52
:
PUNE
7
:
BARODA
30
:
JALANDHAR
53
:
RAIPUR
8
:
BELGUM
31
:
JAMMU
54
:
RAJKOT
9
:
BHILWARA
32
:
JAMNAGAR
55
:
RANCHI
10
:
BHOPAL
33
:
JAMSHEDPUR
56
:
SALEM
11
:
BHUBANESWAR
34
:
JODHPUR
57
:
SHIMLA
12
:
BURDHWAN
35
:
KAKINADA
58
:
SHOLAPUR
13
:
CALICUT
36
:
KANPUR
59
:
SILIGURI
14
:
CHANDIGARH
37
:
KOLHAPUR
60
:
SURAT
15
:
CHENNAI
38
:
KOLKATA
61
:
THIRUVANANTHAPURAM
16
:
COCHIN
39
:
LUCKNOW
62
:
TIRUPATI
17
:
COIMBATORE
40
:
LUDHIANA
63
:
TRICHUR
18
:
DEHRADUN
41
:
MADURAI
64
:
TRICHY
19
:
DHANBAD
42
:
MANGALORE
65
:
UDAIPUR
20
:
ERODE
43
:
MUMBAI
66
:
UDUPI
21
:
GORAKHPUR
44
:
MYSORE
67
:
VARANASI
22
:
GUWAHATI
45
:
NAGPUR
68
:
VIJAYAWADA
23
:
GWALIOR
46
:
NASIK
69
:
VISHKHAPATNAM
For locations other than the above, the Company will continue to explore the possibility of remitting the dividend electronically using ECS details. 1.
If you are located at any of the above ECS centres and have not registered your ECS, please arrange to forward your ECS Mandate to your DP if the shares are held in demat mode, or to the Company/its Registrars, if the shares are held in physical form, immediately.
2.
Even if you are not located at the above ECS centers, please register your ECS (as stated in point 1 above), as the Company and its bankers will make best endeavors to remit dividend electronically by other electronic modes.
3.
If your bank particulars have changed for any reason, please arrange to register the ECS with the revised bank particulars.
The Company will continue to use the ECS Mandate for remittance of dividend either through ECS or other electronic modes failing which the bank details will be printed on dividend warrant. All the arrangements are subject to RBI guidelines, issued from time to time. Members having shares in physical form may either access the Company’s website www.hul.co.in for downloading the ECS Registration form or obtain it from the Company/its Registrar.
152
Hindustan Unilever Limited
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$03103"5& */'03."5*0/ REGISTERED OFFICE :
165/166, Backbay Reclamation, Mumbai - 400 020.
SOLICITORS
:
Crawford Bayley & Co.
AUDITORS
:
Lovelock & Lewes
BANKERS
:
ABN AMRO Bank Bank of America Bank of Baroda Citibank N. A. Corporation Bank Deutsche Bank HDFC Bank Hongkong & Shanghai Banking Corporation ICICI Bank Indian Bank Punjab National Bank Standard Chartered Bank State Bank of Hyderabad State Bank of India Union Bank of India
PLANT LOCATIONS Northern Region Location
Address
BAROTIWALA
n Khasra No. 94-96, 355-409, Village Balyana, Barotiwala IA, Tehsil Kasauli, District Solan, Himachal Pradesh - 174 103
KHALILABAD
n Plot No. D34-D38, UPSIDC Industrial Area, District Sant Kabir Nagar, Khalilabad -271 175, Uttar Pradesh
ETAH – BEVERAGES
n G. T. Road, Etah – 207 001, Uttar Pradesh
ETAH - INSTANT TEA EXPORTS
n Kasganj Road, Etah - 207 001, Uttar Pradesh
HARIDWAR
n Plot No. 1, Sector 1A, Integrated Industrial Estate, Ranipur, Haridwar - 249 403, Uttaranchal
NALAGARH
n Hudbust No. 143, Khasra No. 182, 183, 187/1, Village - Kirpalpur, Tehsil-Nalagarh, District Solan, Himachal Pradesh - 174 101 n Khasra No. 1350 – 1318, Bhatoli Kalan, Hill Top Industrial Area, Jharmajri, Tehsil Nalagarh, District Solan - 173 295
ORAI
n A-1, Industrial Area, UPSIDC, Orai, Jalanun, Uttar Pradesh
RAJPURA
n A-5, Phase ll-B, Focal Point, Rajpura - 140 401, Punjab
SUMERPUR
n A-1, UPSIDC Industrial Area, Bharua, Sumerpur, Hamirpur - 210 502, Uttar Pradesh
Southern Region Location
Address
COCHIN
n Tatapuram PO, Cochin – 682 014, Kerala
DHARWAD
n Plot No.125/126, KIADB Industrial Area, Dharwad, Belur - 580 011, Karnataka
HOSUR
n Plot No.50 & 51, SIPCOT Industrial Complex, Hosur - 635 109, Tamilnadu
MANGALORE
n Sultan Batter Road, Boloor, Mangalore – 575 003, Karnataka
n Edapally, Cochin – 682 024, Kerala
MYSORE
n Plot No. 424, Hebbal Industrial Area, Mysore – 570 016, Karnataka
PONDICHERRY
n Off NH 45-A, Vadamangalam, Pondicherry - 605 102 n No. 3, Cuddalore Road, Kirumambakkam, Pondicherry – 607 402
Corporate Information
Annual Report 2008-09
153
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$03103"5& */'03."5*0/ Eastern Region Location
Address
TINSUKIA
n Dag No. 21 of 122 FS Grants, Mouza-Tingrai, Off NH No. 37, Doom Dooma Industrial Estate, Tinsukia - 786 151, Assam
HALDIA
n PO Durgachak, Haldia - 721 602, West Bengal
KOLKATA
n 1, Transport Depot Road, Kolkata - 700 088, West Bengal n 63, Garden Reach, Kolkata - 700 024, West Bengal n P10 Taratola Road, Kolkata - 700 088, West Bengal
Western Region Location
Address
KHAMGAON
n C-9, MIDC, Khamgaon - 444 303, District Buldhana, Maharashtra
CHHINDWARA
n 5/6 KM stone, Narsinghpur Road, Lehgadua, Chhindwara - 480 002, Madhya Pradesh
CHIPLUN
n Plot No. B-7, Lote Parshuram MIDC, Khed Taluka, District Ratnagiri, Chiplun – 415 722, Maharashtra
GOA
n Plot No. 132-139, Kundaim Industrial Estate, Kundaim, Goa – 403 115
KALWA
n Plot No. 7 & 7A, MIDC Industrial Area, Thane - Belapur Road, Post Airoli, Maharashtra
KANDLA
n Shed Nos. 177 & 178, Sector -1, Plot Nos. 253-257, Sector IV Kandla Special Economic Zone, Gandhidham - 370 230, Gujarat n Shed Nos. 42/47, Sector - II, Kandla Free Trade Zone, Kandla, Gandhidham - 370 230, Gujarat
MUMBAI
n Aarey Milk Colony, Goregaon, Mumbai – 400 065, Maharashtra
NASIK
n Plot No. A 8/9, MIDC, Malegaon, Sinnar - 422 103, Maharashtra
PUNE
n Nutan Warehousing Complex, Pune Saswad Road, Fursungi, Pune - 412 308, Maharashtra
SILVASSA
n Survey No. 151/1/1, Village Dapada, Khanvel Road, Silvasa - 396 230 n Survey No. 907, Kilwali Road, Amli Village, Near Gandhidham Bus Stop, Silvassa - 396 230 n Orient Press Complex, Survey No. 297/1/2, Dungrapada, Village Saily, Silvassa - 396 230 n Survey No. 46/11, Plot No 16, Naroli Road, Village Athal, Silvassa - 396 230
154
Hindustan Unilever Limited
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Registered Office : 165/166, Backbay Reclamation, Mumbai - 400 020.
1309: '03. I/We................................................................................................................................................................................................................. of.............................................................................................................................................................................................................being a Member/Members of the above named Company, hereby appoint Mr./Ms.......................................................................................................... of ...........................................................................................................................................................................................or failing him/her Mr./Ms................................................................................................of.......................................................................................................... .................................................................................as my/our Proxy to attend and vote for me/us on my/our behalf at the 76th Annual General Meeting of the Company, to be held on Friday, 3rd July, 2009 at 2.30 P.M. and at any adjournment thereof. I wish my above Proxy to vote in the manner as indicated in the box below*: Reso. No.
Description
1.
Adoption of Annual Accounts and Reports thereon for the period ended 31st March, 2009
For
2.
Declaration of Dividend
3.
Re-election of the following persons as Director : a) Mr. H. Manwani b) Mr. D. S. Parekh c) Prof. C. K. Prahalad d) Mr. A. Narayan e) Mr. S. Ramadorai f) Dr. R. A. Mashelkar
4.
Appointment of M/s. Lovelock & Lewes as Auditors of the Company and to fix their remuneration for the year ending 31st March, 2010.
5.
Appointment of Mr. Dhaval Buch as a Director of the Company
6.
Appointment of Mr. Gopal Vittal as a Director of the Company
7.
Appointment of Mr. Sridhar Ramamurthy as a Director of the Company
8.
To appoint Mr. Dhaval Buch as a Wholetime Director of the Company and to fix his remuneration.
9.
To appoint Mr. Gopal Vittal as a Wholetime Director of the Company and to fix his remuneration.
10.
To appoint Mr. Sridhar Ramamurthy as a Wholetime Director of the Company and to fix his remuneration.
Against
Signed this......................day of..........................2009. Reference Folio No./DP ID & Client ID No. of shares........................ Notes :
Affix Revenue ........................................................................... Stamp Signature
1. The Proxy, to be effective, should be deposited at the Registered Office of the Company at 165/166, Backbay Reclamation, Mumbai 400 020 not later than FORTY-EIGHT HOURS before the commencement of the aforesaid meeting. 2. A Proxy need not be a Member of the Company. * 3. This is only optional. Please put a ‘X’ in the appropriate column against the resolutions indicated in the Box. If you leave the ‘For’ or ‘Against’ column blank against any or all the resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate. Should you so desire, you may also appoint the Chairman or the Company Secretary of the Company as your Proxy, who shall carry out your mandate as indicated above in the event of a poll being demanded at the Meeting.
Back to 'What's Inside'
Back to 'What's Inside'
Our Corporate Purpose Our mission is to add Vitality to life. We meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life. Our deep roots in local cultures and markets around the world give us our strong relationship with consumers and are the foundation for our future growth. We will bring our wealth of knowledge and international expertise to the service of local consumers - a truly multi-local multinational. Our long-term success requires a total commitment to exceptional standards of performance and productivity, to working together effectively, and to a willingness to embrace new ideas and learn continuously. To succeed also requires, we believe, the highest standards of corporate behaviour towards everyone we work with, the communities we touch, and the environment on which we have an impact. This is our road to sustainable, profitable growth, creating long-term value for our shareholders, our people, and our business partners.
Registered Office 165/166, Backbay Reclamation, Mumbai - 400 020. XXX IVM DP JO